What are options?
An option is the right, but not the obligation, to buy or sell a particular asset (e.g. shares or an index representing such assets) at a fixed price on or before a specified date. The potential loss to the buyer of an option is limited to the initial price paid for the contract (the premium), regardless of the performance of the underlying asset. This can help the investor to control the amount of risk assumed.
One advantage of options is that they can be used to try to capitalise on an upward or downward move in the market. They also allow investors to participate in price movements in the stock market without committing the large amount of funds needed to buy shares outright.
For more information about our Options service please contact info.options@rensburgsheppards.co.uk.