How to Buy Stock Options

Video Transcript

"No guts no glory. Hi this is Roger Groh at Groh Asset Management. Today we're here to talk about stock options and where you can buy them. Do you think that you know where a stock is going to up or down? And do you want to profit from doing that? And do you think that the best way for you to make money in that move is by buying a stock option? Well you need to go back to the stock brokerage firm or bank where you currently do business and ask your broker or somebody who knows options that can help you, to identify the specific option that you have in mind. Once that's been identified, you can then ask for a price. Is it a dollar, 2 dollars, 10 dollars, whatever it might be and then you can make your buying decision accordingly. In the back of the Wall Street Journal and Barron's, some options are listed. Now that price clearly will not be an accurate appraisal of the value of that option because that's old. Also if you go online you're probably looking at old data. Only your broker or bank will be able to give you up to the date information. One other thing, many options trade privately, not publicly. So if you want to deal in buying stock options and you want to do it privately, then you've got to do your homework. You've got come up with your own valuation and your own price that you're willing to buy or sell at, find somebody who wants to buy something that trades away from one of the exchanges and then do the transaction on your own. By far that's where most of the stock option trading and purchases are made. So I hope it helps, plus think about your broker. Find somebody seasoned who's done it for a long time, they'll help you quite a bit and improve your chances of making money. I'm Roger Groh with Groh Asset and thank you very much for spending time with me."