Options

Options are agreements concluded between two persons committing one person to give the second person the right to purchase or sell certain assets at certain prices within a certain limit of time.

There are two main types of options:

Call options — give the buyer of the option the right to purchase from the seller of the option a certain amount of shares of a certain company at a certain price any time untill the fixed date inclusive.

Put options — give the buyer of the option the right to sell to the seller of the option a certain amount of shares of a certain company at a certain price any time untill the fixed date inclusive.

The main advantage of options is the versatility of their application; options can be as speculative and as conservative as it is necessary for your investment strategy. Please pay attention to the following advantages of options:

You can secure stock open positions against the fall in market prices.
You can increase current income from your open stock positions.
You can prepare yourself for market transactions, even if you are not aware of how the prices might change.
You can gain profit from rise in stock prices avoiding the full purchase of equities.

Options can be used for realisation of both short-term and long-term investment objectives.

Should you have any questions, please contact us at Capital Market and Investments Department by phone: (+371) 701-00-08, fax: (+371) 701-01-91 (GMT +2) or e-mail: margin@parex.lv.