What Are Stocks?
Stocks represent ownership in a company. When you buy shares, you own a portion of that business and benefit from its growth.
Common Stock
Voting rights and strong growth potential.
Preferred Stock
Fixed dividends with lower risk but no voting rights.
Key Stock Terms
- Market Price: Current value
- Volume: Shares traded
- Dividend: Profit payout
- Bull Market: Prices rising
- Bear Market: Prices falling
What Are Options?
Options are contracts that give you the right (not obligation) to buy or sell a stock at a specific price before a certain date.
Call Option
Used when you expect the price to go up.
Put Option
Used when you expect the price to go down.
Important Option Terms
- Strike Price: Set price
- Premium: Cost of contract
- Expiration: End date
- ITM: Profitable
- OTM: Not profitable
Stocks vs Options
| Feature | Stocks | Options |
|---|---|---|
| Ownership | Yes | No |
| Risk | Medium | High |
| Time Limit | No | Yes |
Think About This 🤔
Would you rather build wealth slowly with stocks or take higher risk for faster returns using options?