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Article: Trading options on the Dow: Dow Jones Industrial Average options are getting very popular. Here's a way to use them.
- Article from:
- Money Digest
- Article date:
- December 1, 1997
- Author:
CopyrightCOPYRIGHT 1997 Money Digest. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Market Opinion: Bullish on the stock market in the near-term.
Strategy: Participate in the expected upward movement of the Dow Jones Industrial Average.
Action: Purchase a DJX call option.
Example: The following example does not include commissions, which should be taken into consideration before entering into any option position. Taxes are also a consideration and should be discussed with a tax adviser. This strategy is based on a hypothetical situation and should be considered as an example of a potential trading approach.
Purchasing call options provide limited risk, and unlimited profit potential. Profit increases as the DJX rises ...