Imagine if you're a kid and you go to a store. The store has many different toys for you to pick from. But you only have a certain amount of money, and the toys all have different prices. You have to make sure that the total cost of the toys you pick doesn't exceed the amount of money you have.
Now, think of each stock as a different toy. Each stock has a price - that's like the cost of the toy. And just like you have a limit on how much you can spend, each stock has a limit on how much its price can go up and down. This limit is called a "strike price".
"Call options" are like a wish that the stock's price will go up. If the stock's price goes above the "strike price", you can buy the stock at the "strike price" and then sell it for the higher current price, making a profit.
"Put options" are like a wish that the stock's price will go down. If the stock's price goes below the "strike price", you can sell the stock at the "strike price" and then buy it back for the lower current price, also making a profit.
In simpler terms, options are like bets on whether the price of a stock will go up or down. And just like how you have to pick toys that don't exceed your budget, the amount of money you can "invest" in these bets is limited by something called "premium".
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bullish
Sentiment Score: 1.2
Article's Subject:
Cassava Sciences, Inc. SAVA
Market Sectors:
Pharmaceuticals, Biotechnology, Healthcare
Markets:
S&P 500, Nasdaq
Market Capitalization:
$11.82B
Company Types:
Common Stock
Article's Sentiment Score: 1.2
Article's Subject:
Cassava Sciences, Inc. SAVA
Market Sectors:
Pharmaceuticals, Biotechnology, Healthcare
Markets:
S&P 500, Nasdaq
Market Capitalization:
$11.82B
Company Types:
Common Stock
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