Newbie questions

[linas@linas.org]

It's been rumoured that Marcel Felgentraeger said:
> But here comes the next
> problem. The day I change the options into stocks I would have to transfer them
> from the account to my depot, to keep everything in balance. On the ther hand I
> would have to transfer another 49 Eur for each option from my bank account,
> since that is the amount of money I have to pay per option the day I change
> them. I can find no way to deal with this, since I can not transfer it to my
> depot, like when I buy stocks, since than I would have twice the number of
> stocks from the change.
> 
> I think I got a knot in my mind. Maybe I just make it more difficult than it
> really is, but in my line of thinking I can not treat the 49 Eur as an expense,
> since I am only shifting the value. 


A stock option is not the same thing as stock.  
In the future, you will hopefully exchange one option and 49 eur to
buy one share of stock.  As a result, you now have one less option,
and 49 less eur, but one more share of stock.  

You should set up *two* accounts: one for the options, and another
for the stock.  Right now, your option account will have options in
it, and the stock account will be empty.  In the future, the options
account will be empty, but the stock account will have stock in it.

> > you can, of course, type in any price you want, but that is not
> > usualy wise.  In the US, the expression is 'counting your chickens before
> > they're hatched.'
> 
> So you would just keep the options in a seperate account and update their price
> after they are really in my depot. 

Yes.

> But you said they are traded, so they would

Not all options have market-makers for them.  You can buy & sell
options on the big companies (IBM, MSFT) but not on most smaller
companies.


> have more value than the 1 Eur I have paid, wouldn't they?

probably not.   Becuase they are not excercisable until some point in
the future, its hard to tell what thier value is today.  If the
company goes bankrupt, the options will be valueless in the future.

--linas