Could someone explain this BAC stock to me?

[Neutralman]

Could someone explain what these stocks are to me? I am confused as to what is actually being bought here. Is this a short of some sort? I ask because my friend keeps telling me I should pick up some of these but idk what they even are.

http://investing.money.msn.com/investments/trading-options/?symbol=.BAC\12M21\7.5

 

[rcpratt]

Why don't you like, google it.

 

[DesiPower]

They are expecting BAC to fall to $1.33 by jan 21 or rise to 7.5?

 

[Neutralman]

Why don't you like, google it.

I don't know what I am looking for. I see bank of america at $6.25, but this stock is also called BAC and is at $1.33 right now and lost 20% today? Is that good or bad, since my friend says I should get it minutes ago, its as if a loss is a good thing? So im wondering if its a short.

 

[Macamus Prime]

BAC = Bank of America, no?

 

[Neutralman]

BAC = Bank of America, no?

Yep, since I've posted this topic. The percentage in the link has gone from -17% to -23% for the day.

 

[DesiPower]

Put can Call are basically betting that by a certain date this stock will rise to a certain value or fall to a certain value. For example its 6.25 now for $1.33 you but it for Jan 21. On jan 21 you pay 7.5+1.33 = 8.83. If the stock is worth more than that you win...

This is my wind guess, I an not exactly sure...

This is the option chart, it has something to do with it...
http://finance.yahoo.com/q/op?s=BAC&m=2012-01

 

[rcpratt]

It's an option to sell BAC at $7.50. It's way down because BAC is up today.

 

[blackdogdeek]

it's a put option. you're essentially buying the right to sell BAC at 7.5 by 21 Jan 2012.

http://en.wikipedia.org/wiki/Put_option

 

[Delita]

You should probably let someone who knows what the hell they are doing manage your investments.

 

[GotIssues]

If you don't know what put and call are, then you probably shouldn't be even thinking about purchasing them. Even if you know what they are, you probably shouldn't be even thinking about purchasing them.

 

[Corporate Thug]

You should probably let someone who knows what the hell they are doing manage your investments.

This. esp. if your messing with option trading.

 

[DesiPower]

If you don't know what put and call are, then you probably shouldn't be even thinking about purchasing them. Even if you know what they are, you probably shouldn't be even thinking about purchasing them.

lol, exactly, they are tools for professionals to hedge their stock purchases, I don't think anyone who does stock trading part time should get into these...