WHAT IS KONTRAK OPSI SAHAM?

A contract where buyer (TAKER) has the right but not the obligation to buy an amount of of stocks (CALL) or right to sell stocks (PUT) to the seller (WRITER) at certain price, at a certain time or before the appointed expiry date.

If we buy an option, we are given a choice whether to use our right or not, which of course if our right is giving a benefit for us we will use it if not then our stock option will be expired.

Investor could choose whether to act as taker or writer according to the financial purpose and goal.

WHY STOCK OPTION?

The answer is simple, stock option is one of the invetment instrument that has the ability to give the maximum profit to investors because it has some advantages such as leverage (profit doubling), risk management and give higher investment return.

KOS BENEFIT

• To give investment profit from stock price movement and lower commission fees with risk management
• As a hedging tool
• To flexibly invest with the easiness to open short selling position
• To minimize investment loss

KOS BEI SPECIFICATIONS

PREMIUM INTRODUCTION

Let’s see Call example as below:

XYZ Stock at Rp. 5.000

In the money, meaning that the if the option is exercised then the option owner would get lower price of stock compared to market price.

At the money, if strike price is the same as market price.

Out of Money, meaning that if the option is exercised then the option owner will buy the stock with higher price than the market price.

ILLUSTRATION

1 Juli, ABCD stock price, Rp.5.000, with premium KOS CALL SEP ABCD5200 (Strike Price 5200, ending September) is Rp.250. Meaning the total contract price is Rp.250 X 10.000 = Rp.2.500.000, please remember that the contract size is 10.000 stocks.

Because ABCD stock price is Rp.5.000 and the contract value is Rp.250 per stock then our break even is at Rp.5.250, meaning if before the expiry date at September the stock price does not go up more than Rp.5.250 we are experiencing a loss, but out loss is only as far as our premium which is Rp.2.500.000.

For example, we Open Buy KOS CALL, the next 2 weeks the ABCD stock price become Rp.5.500 and of course the option price also goes up to Rp.450, then our profit is (Rp.450 - Rp.250) x 10.000 lembar = Rp.2.000.000. We almost double our capital in two weeks time, and if we want we could sell our option by Close Sell. (Commission ignored in this illustration)