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How to Protect and Enhance Your Investment Portfolio

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  • Why does the Options Industry Council refuse to promote the use of puts and calls to reduce the risks of holding employee stock options and restricted stock . The case is far greater to sell calls versus employee stock options to reduce risk than to sell covered calls versus long stock.

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How to Protect and Enhance Your Investment Portfolio

  1. 1. Options 101 “ How to Protect and Enhance Your Investment Portfolio with Options” Barrington Capital Management, Inc . A Registered Investment Advisor Bob Lawson (952) 835 1000 THE OPTIONS INDUSTRY COUNCIL C O I
  2. 2. Options Strategies for Stock Investors C O I
  3. 3. The Options Industry Council 2 Options Strategies or Stock Investors For the sake of simplicity, the examples that follow do not take into consideration commissions and other transaction fees, tax considerations, or margin requirements, which are factors that may significantly affect the economic consequences of a given strategy. An investor should review transaction costs, margin requirements and tax considerations with a broker and tax advisor before entering into any options strategy. Options involve risk and are not suitable for everyone. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options . Copies have been provided for you today and may be obtained from your broker, one of the exchanges or The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, IL 60606 or call 1-888-OPTIONS or visit www.888options.com. Any strategies discussed, including examples using actual securities and price data, are strictly for illustrative and education purposes and are not to be construed as an endorsement, recommendation or solicitation to buy or sell securities. Supporting documentation will be supplied upon written request.
  4. 4. Presentation Outline <ul><li>Essential Concepts </li></ul><ul><ul><li>Terminology and Mechanics </li></ul></ul><ul><li>Buying Calls </li></ul><ul><li>Buying Puts </li></ul><ul><ul><li>The Put Buying Strategy </li></ul></ul><ul><li>Covered Calls </li></ul><ul><li>Options Pricing </li></ul><ul><li>LEAPS ® </li></ul>3
  5. 5. Essential Concepts C O I
  6. 6. Why Buy Stocks? <ul><li>What is the opportunity? </li></ul><ul><li>What is the risk? </li></ul><ul><li>If you buy a stock for $100.00 today and sell it one year later for $100.00, did you lose money? </li></ul><ul><li>Is there a way to change the risk/reward of buying stocks? </li></ul>4
  7. 7. Why Options? Why Bother? <ul><li>Without options, these are all of the available choices. </li></ul>5 Long Stock Short Stock Treasury Bill
  8. 8. Why Options? Why Bother? <ul><li>With options, these are some of the available choices. </li></ul>6 Options give you options! Long Call Short Call Long Put Short Put Long Straddle Short Straddle Long Strangle Short Strangle Long Call Spread Short Call Spread Long Put Spread Short Put Spread Ratio Call Spread Call Volatility Spread Long Split- Strike Synthetic Put Volatility Spread
  9. 9. Options Are Tools <ul><li>Options give you more ways to implement your market research </li></ul><ul><li>Options make it possible to target a variety of investment objectives </li></ul><ul><li>° Reduce risk </li></ul><ul><li>° Increase income </li></ul><ul><li>° Unique tradeoffs </li></ul>7
  10. 10. Terminology and Mechanics C O I
  11. 11. What Are Options? <ul><li>Options are: </li></ul><ul><li>Contracts giving the buyer </li></ul><ul><li>the right to buy or sell </li></ul><ul><li>an underlying asset (e.g., 100 shares of stock) </li></ul>8
  12. 12. Important Terminology <ul><li>Holder : Buyer (has a “long” position) Options buyers have rights Long Calls: the right to buy Long Puts: the right to sell </li></ul><ul><li>Writer : Seller (has a “short” position) Options writers have obligations Short Calls: the obligation to sell Short Puts: the obligation to buy </li></ul>9
  13. 13. Important Terminology <ul><li>Underlying : Typically 100 shares of the stock on which the right or obligation exists. </li></ul><ul><li>EXAMPLE: </li></ul><ul><li>XYZ December 45 Call at $5.50 </li></ul><ul><li>(100 shares of XYZ stock is the underlying of this option.) </li></ul>10
  14. 14. Important Terminology <ul><li>Strike or Exercise Price : Price at which the underlying may be bought or sold. </li></ul><ul><li> EXAMPLE: </li></ul><ul><li>XYZ December 45 Call at $5.50 </li></ul><ul><li>($45.00 per share is the price at which the buyer of this call has the right to buy 100 shares of XYZ stock.) </li></ul>11
  15. 15. Important Terminology <ul><li>Expiration Date : The day on which the option ceases to exist. </li></ul><ul><li>Typically, the expiration date is the Saturday </li></ul><ul><li>following the third Friday of the expiration month. </li></ul><ul><li> EXAMPLE: </li></ul><ul><li>XYZ December 45 Call at $5.50 </li></ul><ul><li>(The Saturday following the third Friday in December is the expiration date of this option.) </li></ul>12
  16. 16. Important Terminology <ul><li>Premium : The price of an option that is paid by the buyer and received by the seller. </li></ul><ul><li> EXAMPLE: </li></ul><ul><li>XYZ December 45 Call at $5.50 </li></ul><ul><li>($5.50 per share, or $550.00 per option, not including commissions, is paid by the option buyer and received by the option writer.) </li></ul>13
  17. 17. Important Terminology <ul><li>Exercise : Buyers invoke their rights </li></ul><ul><ul><li>Call Exercise: Call buyers choose to buy stock at the strike price (from the call seller) </li></ul></ul><ul><ul><li>Put Exercise: Put buyers choose to sell stock at the strike price (to the put seller) </li></ul></ul>14
  18. 18. Important Terminology <ul><li>Assigned : Being called upon to fulfill an obligation </li></ul><ul><ul><li>Call Assignment: Call sellers are randomly chosen and are required to sell stock at the strike price to the call buyer </li></ul></ul><ul><ul><li>Put Assignment: Put sellers are randomly chosen and are required to buy stock at the strike price from the put buyer </li></ul></ul>15
  19. 19. Intrinsic Value And Time Value 16 Stock Price = $56.00 Price of 50 strike Call = $8.00 Time Value = Total Premium – Intrinsic Value For a 60 Call at $2.10 What is the intrinsic value? What is the time value? Stock Price = $56.00 Strike Price = $50.00 Time Value = $2.00 Intrinsic Value = $6.00 Total Option Premium (or Price) = $8.00 $0 $2.10 Intrinsic Value must be greater than or equal to zero. note:
  20. 20. Intrinsic Value And Time Value Quiz 17 $78.00 $36.00 $41.00 Option Price Intrinsic Value Time Value Stock Price Option 70 Call 35 Call 42.50 Call $10.50 $3.75 $1.65 $8.00 $2.50 0 $1.65 $1.00 $2.75
  21. 21. The Ins And Outs: Calls <ul><li>In-the-Money Calls : </li></ul><ul><li>Stock price above strike price </li></ul><ul><li>In-the-money calls have intrinsic value </li></ul><ul><li>EXAMPLE: With a stock price of $63.00, the 60 Call is in-the-money. Specifically, it is in-the-money by $3.00, and it has $3.00 (per share) of intrinsic value. </li></ul>18
  22. 22. The Ins And Outs: Calls <ul><li>Out-of-the-Money Calls : </li></ul><ul><li>Stock price below strike price </li></ul><ul><li>Out-of-the-money calls do not have intrinsic value </li></ul><ul><li>EXAMPLE: With a stock price of $63.00, the 65 Call is out-of-the-money. Specifically, it is out-of-the-money by $2.00, and it has no intrinsic value. </li></ul>19
  23. 23. The Ins And Outs: Calls <ul><li>At-the-Money Calls : </li></ul><ul><li>Stock price equal to strike price </li></ul><ul><li>At-the-money calls do not have intrinsic value </li></ul><ul><li>EXAMPLE: With a stock price of $60.00, the 60 Call is at-the-money. </li></ul>20
  24. 24. The Ins And Outs Quiz 21 $55.00 $33.00 $77.00 Stock Price Option In, At, Out 60 Call 35 Call 75 Call Out In Out
  25. 25. I’m Long, What Now? <ul><li>Exercise it </li></ul><ul><li>Let it expire </li></ul><ul><li>Sell it </li></ul>22
  26. 26. I’m Short, What Now? <ul><li>Live with assignment </li></ul><ul><li>Let it expire </li></ul><ul><li>Buy it back </li></ul>23
  27. 27. Buying Calls C O I
  28. 28. What’s The Deal? <ul><li>THE CALL BUYER: </li></ul><ul><li>has the right to purchase stock </li></ul><ul><li>at an agreed upon price (the strike or exercise price) </li></ul><ul><li>until the expiration date </li></ul><ul><li>for this right the call buyer pays a premium </li></ul>24
  29. 29. Call Buying Example <ul><li>STOCK XYZ: </li></ul><ul><ul><li>is trading at $60.00 </li></ul></ul><ul><li>VIEW: </li></ul><ul><ul><li>You are bullish on the stock </li></ul></ul><ul><ul><li>You want to limit risk </li></ul></ul><ul><li>ACTION: </li></ul><ul><ul><li>You buy a three-month, 60 strike Call for $3.00 per share ($300.00 per option) </li></ul></ul>25
  30. 30. Example <ul><li>Buy 60 strike Call at $3.00 </li></ul>26 $70.00 $65.00 $60.00 $55.00 $50.00 Long 60 Call Value at Expiration Long 60 Call Initial Cost Total Profit/(Loss) 0 ($3.00) 0 ($3.00) 0 ($3.00) $5.00 $2.00 $10.00 $7.00 Stock Price at Expiration ? ? ? ? ? ($3.00) ($3.00) ($3.00) ($3.00) ($3.00) ? ? ? ? ?
  31. 31. Example <ul><li>Buy 60 strike Call at $3.00 </li></ul>27 5 5 55 60 65 0 – + 3 Breakeven at expiration: Strike Price + Option Premium $60.00 + $3.00 = $63.00 Long stock at $60.00 $63
  32. 32. The Investor <ul><li>XYZ stock is trading at $60.00 </li></ul><ul><li>Philip has $6,000.00 </li></ul><ul><li>Philip buys 1 XYZ 60 Call at $3.00 ($300.00) and deposits $5,700.00 in a money market account </li></ul><ul><li>What is Philip’s goal? Risk? </li></ul>28 Goal: to buy stock with limited risk Risk: $300 or 5% of capital
  33. 33. The Investor <ul><li>IN THREE MONTHS: </li></ul><ul><li>What should Philip do if the price of XYZ is above $60.00? </li></ul><ul><li>What should Philip do if the price of XYZ is below $60.00? </li></ul>29 Exercise the call – buy the stock Call expires – re-evaluate Maybe buy stock at lower price Maybe look for another investment
  34. 34. The Trader <ul><li>XYZ stock is trading at $60.00 </li></ul><ul><li>Peter has $6,000.00 </li></ul><ul><li>Peter buys 20 XYZ 60 Calls at $3.00 each </li></ul><ul><li>What is Peter’s goal? Risk? </li></ul><ul><li>What else should Peter consider? </li></ul>30 <ul><ul><li>Profit target </li></ul></ul><ul><ul><li>Time period </li></ul></ul><ul><ul><li>Point to take a loss </li></ul></ul>
  35. 35. Why Buy Calls? <ul><li>You are bullish on a particular stock and you are an investor who wants a small cash outlay and a limited, pre-defined risk </li></ul><ul><li>OR </li></ul><ul><li>You are a trader who wants to leverage some risk capital and are willing to lose the premium paid </li></ul>31
  36. 36. Buying Puts C O I
  37. 37. What Are Puts? <ul><li>Put options are: </li></ul><ul><li>Contracts giving the buyer </li></ul><ul><li>the right to sell </li></ul><ul><li>an underlying asset (e.g., 100 shares of stock) </li></ul>32
  38. 38. Terminology: Puts <ul><li>Holder : Buyer (has a “long” position) Options buyers have rights </li></ul><ul><ul><li>Long Puts: the right to sell </li></ul></ul><ul><li>Writer : Seller (has a “short” position) Options writers have obligations </li></ul><ul><ul><li>Short Puts: the obligation to buy </li></ul></ul>33
  39. 39. Terminology: Puts <ul><li>Exercise : Buyers invoke their rights </li></ul><ul><ul><li>Put Exercise: Put buyers choose to sell stock at the strike price (to the put seller) </li></ul></ul><ul><li>Assigned : Being called upon to fulfill an obligation </li></ul><ul><ul><li>Put Assignment: Put sellers are required to buy stock at the strike price from the put buyer </li></ul></ul>34
  40. 40. I’m Long, What Now? <ul><li>Exercise it </li></ul><ul><li>Let it expire </li></ul><ul><li>Sell it </li></ul>35
  41. 41. I’m Short, What Now? <ul><li>Live with assignment </li></ul><ul><li>Let it expire </li></ul><ul><li>Buy it back </li></ul>36
  42. 42. The Put Buying Strategy C O I
  43. 43. What’s The Deal? <ul><li>THE PUT BUYER: </li></ul><ul><li>has the right to sell stock </li></ul><ul><li>at an agreed upon price (the strike) </li></ul><ul><li>until the expiration date </li></ul><ul><li>for this right the put buyer pays a premium </li></ul>37
  44. 44. Put Buying Strategy <ul><li>STOCK ABC: </li></ul><ul><ul><li>is trading at $36.00 </li></ul></ul><ul><li>VIEW: </li></ul><ul><ul><li>You are bearish on the stock </li></ul></ul><ul><ul><li>You want to limit risk </li></ul></ul><ul><li>ACTION: </li></ul><ul><ul><li>You buy a three-month, 35 strike Put for $2.25 per share ($225.00 per option) </li></ul></ul>38
  45. 45. Example <ul><li>Buy 35 strike Put at $2.25 </li></ul>39 $45.00 $40.00 $35.00 $30.00 $25.00 Long 35 Put Value at Expiration Long 35 Call Initial Cost Total Profit/(Loss) $10.00 $7.75 $5.00 $2.75 0 ($2.25) 0 ($2.25) 0 ($2.25) Stock Price at Expiration ? ? ? ? ? ($2.25) ($2.25) ($2.25) ($2.25) ($2.25) ? ? ? ? ?
  46. 46. Example <ul><li>Buy 35 strike Put at $2.25 </li></ul>40 5 5 30 35 40 0 – + Breakeven at expiration: Strike Price – Option Premium $35.00 – $2.25 = $32.75 $32.75
  47. 47. Why Buy Puts? <ul><li>You are bearish on a particular stock </li></ul><ul><li>You are looking to benefit from falling prices with: </li></ul><ul><ul><li>a small cash outlay </li></ul></ul><ul><ul><li>a limited, pre-defined risk </li></ul></ul><ul><li>You want an alternative to selling stock short </li></ul>41
  48. 48. Buying Puts – Another Look <ul><li>What are Protective Puts? </li></ul><ul><li>Puts can be purchased to limit the risk of a stock position. In this example, own 100 shares of ABC at $36.00 and buy the 35 strike Put In new position, own 100 shares and own one of the 35 strike Protective Puts </li></ul><ul><li>Rather than sell the stock, buy insurance! </li></ul>42
  49. 49. Options Give You Options <ul><li>Options are tools that give you more ways to implement your market research. </li></ul>43
  50. 50. Covered Calls C O I
  51. 51. What’s The Deal? <ul><li>COVERED CALLS DEFINED: own stock and sell calls on a share-for-share basis </li></ul><ul><li>Buying 100 shares and simultaneously selling 1 call is commonly known as a “buy-write,” buying the shares and writing or selling an option. The buy-write is a form of the covered call. </li></ul><ul><li>The seller of a covered call : </li></ul><ul><li>has the obligation to sell stock (if assigned) at the strike price </li></ul><ul><li>until the expiration date </li></ul><ul><li>in exchange for accepting the obligation, the call seller receives a premium </li></ul>44
  52. 52. Why Sell Covered Calls? <ul><li>You are neutral to moderately bullish about a particular stock and </li></ul><ul><li>are looking to </li></ul><ul><ul><li>increase returns in stable markets </li></ul></ul><ul><li>AND </li></ul><ul><ul><li>reduce stock price risk </li></ul></ul>45
  53. 53. Covered Call Example <ul><li>You are holding stock XYZ that is trading at $52.00 </li></ul><ul><li>VIEW: </li></ul><ul><ul><li>You are neutral to bullish on the stock </li></ul></ul><ul><ul><li>You want to outperform in a flat market </li></ul></ul><ul><li>ACTION : </li></ul><ul><ul><li>You sell a 90-day, 55 strike Call for $1.75 ($175.00) (The stock does not pay a dividend) </li></ul></ul>46
  54. 54. Example <ul><li>Buy stock at $52.00, sell 55 Call at $1.75 </li></ul>47 $60.00 $55.00 $52.00 $50.00 $45.00 Long Stock Profit/(Loss) at Expiration Short 55 Call Profit/(Loss) at Expiration Total Profit/(Loss) ($3.25) $4.75 Stock Price at Expiration ? $1.75 $1.75 $1.75 $1.75 ($5.25) ($0.25) $1.75 $4.75 ($7.00) ($2.00) 0 $3.00 $8.00 ? ? ? ? ? ? ? ? ?
  55. 55. Example <ul><li>Buy stock at $52.00, sell 55 Call at $1.75 </li></ul>48 5 5 50 55 60 0 – + Breakeven at expiration: Initial Stock Price – Option Premium $52.00 – $1.75 = $50.25 $50.25 Long stock at $52.00
  56. 56. Thinking Ahead <ul><li>Follow-up planning is required </li></ul><ul><ul><li>If the stock price rises “too much” . If you do not intend to sell the stock, you must buy, to close, the call before it is assigned. Remember, if assignment occurs, then you must sell the stock. </li></ul></ul>51
  57. 57. Thinking Ahead <ul><li>Follow-up planning is required </li></ul><ul><ul><li>If the stock price falls “too much” . Covered writing involves the risk of stock ownership (less the premium received). </li></ul></ul>52
  58. 58. Why Sell Covered Calls? <ul><li>You are neutral to moderately bullish on a particular stock </li></ul><ul><li>AND </li></ul><ul><li>You are looking to increase stock returns above dividend returns in stable markets and reduce stock price risk </li></ul>53
  59. 59. Options Pricing C O I
  60. 60. The Mystery Of Prices <ul><li>ABC three-month 60 Call at $3.00 </li></ul><ul><li>SMB three-month 55 Call at $2.00 </li></ul><ul><li>XYZ three-month 35 Put at $2.25 </li></ul><ul><li>QRS three-month 45 Put at $2.75 </li></ul><ul><li>What determines these prices? </li></ul>54
  61. 61. Premiums <ul><li>Options are insurance policies </li></ul><ul><li>Put options can insure stock holdings </li></ul><ul><ul><li>Puts allow you to fix a selling price </li></ul></ul><ul><li>Call options can insure cash holdings </li></ul><ul><ul><li>Calls allow you to fix a buying price </li></ul></ul>55
  62. 62. Car Insurance <ul><li>Which driver would you rather insure? </li></ul>56 $15,000.00 $500.00 6 Months 5% Driver A Driver B Car Price Deductible Time Interest Rate $15,000.00 $500.00 6 Months 5% $450.00 $650.00 Premium
  63. 63. Options Insurance <ul><li>Which stock would you rather insure? </li></ul>57 $48.00 $45.00 3 Months 5% Stock A Stock B Stock Price Strike Price Time Interest Rate $48.00 $45.00 3 Months 5% $300.00 $575.00 Premium
  64. 64. Options Pricing <ul><li>Inputs: </li></ul><ul><li>Stock price </li></ul><ul><li>Strike price </li></ul><ul><li>Time until expiration </li></ul><ul><li>Cost of money (interest rates less dividends) </li></ul><ul><li>Volatility (a measure of risk) </li></ul><ul><li>Outputs: </li></ul><ul><li>Call and put premiums </li></ul>58
  65. 65. Realistic Expectations <ul><li>Options pricing models can serve as roadmaps to help you plan your trades. </li></ul><ul><li>Options pricing models do not make decisions. Investors and traders are responsible for making decisions. </li></ul>59
  66. 66. What To Expect <ul><li>• CONSIDER: Stock = $50.00 </li></ul><ul><li>50 Call = $ 3.00 </li></ul><ul><li>• WHAT IF: Stock $50.00  $51.00 </li></ul><ul><li>50 Call $3.00  </li></ul><ul><li>Assume all other factors are fixed: </li></ul><ul><ul><li>Time = 60 days </li></ul></ul><ul><ul><li>Volatility = 28% </li></ul></ul><ul><ul><li>Interest Rates = 4% </li></ul></ul><ul><ul><li>Dividend = 0 </li></ul></ul>60 $ ? $ 3.50
  67. 67. The Delta Factor <ul><li>Most options prices do not change like stock prices </li></ul><ul><li>DELTA DEFINED: A measure of an option’s expected sensitivity to changes in stock price (assuming all other factors are fixed). </li></ul>61
  68. 68. The Delta Factor <ul><li>Different options have different deltas </li></ul><ul><li>Deep in-the-money calls tend to have higher deltas (approach 1 or 100%) </li></ul><ul><li>Far out-of-the-money calls tend to have low deltas (approach 0) </li></ul>62
  69. 69. What To Expect <ul><li>• CONSIDER: Days to Expiration = 60 </li></ul><ul><li>50 Call = $ 3.00 </li></ul><ul><li>• WHAT IF: Days to Expiration 60 = 30 </li></ul><ul><li>50 Call $3.00  </li></ul><ul><li>Assume all other factors are fixed: </li></ul><ul><li>° Stock Price = $50.00 </li></ul><ul><li>° Volatility = 28% </li></ul><ul><li>° Interest Rates = 4% </li></ul><ul><li>° Dividend = 0 </li></ul>63 $ ? $ 2.00
  70. 70. Time Decay <ul><li>Options prices generally do not decrease at the same rate that time passes to expiration. </li></ul>64
  71. 71. Summary Of Pricing <ul><li>WHO CARES? </li></ul><ul><li>Both investors and traders must have realistic expectations about the results they might achieve. </li></ul>65
  72. 72. LEAPS ® C O I
  73. 73. LEAPS ® <ul><li>Long-term Equity AnticiPation Securities ® (long-term options) </li></ul><ul><li>Similar to short-term options except: </li></ul><ul><ul><li>Longer time frame Jan 2011, Jan 2012 </li></ul></ul><ul><ul><li>Different ticker symbols until they become short-term options </li></ul></ul><ul><ul><li>LEAPS ® are not available on all stocks with short-term options </li></ul></ul>66
  74. 74. Options Buyer’s Enemy #1 67 Death by Time 14 12 10 8 6 4 2 2.5 2 1.5 1 .5 0 Assumptions: ° Stock = $50.00 ° Strike = 50 ° Volatility = 30% ° Interest Rates = 6% ° No Dividends Call Value Value vs. Time to Expiration At-the-Money Call Time to Expiration (Years)
  75. 75. What If The Stock’s A Dud? <ul><li>Compare at-the-money call prices on unchanged stock (50 Call on $50.00 stock): </li></ul>68 Now One month later: Two months later: Three months later: Three-month option Two-year LEAPS ® $3.33 $10.97 $0.00 $1.84 $2.67 $10.42 $10.69 $10.13 (20%) (100%) (31%) (3%) (3%) (3%)
  76. 76. What If You’re Right? <ul><li>Compare prices if the stock goes up $3.25: </li></ul>69 Now, stock at $50.00 Stock at $53.25 Today: One month later: Two months later: Three months later: Three-month option Two-year LEAPS ® $3.33 $5.44 $4.81 $4.04 $3.25 $10.97 $13.32 $13.04 $12.75 $12.45 63% 44% 21% (2%) 21% 18% 16% 13%
  77. 77. Trade-Offs <ul><li>Short-term options have higher leverage. They tend to provide higher returns in quick stock price changes. </li></ul><ul><li>LEAPS ® options allow more time for a forecast to be realized. </li></ul>70
  78. 78. Options Give You Options <ul><li>Options give you more ways to implement your market research </li></ul><ul><li>Options make it possible to target a variety of investment objectives </li></ul><ul><ul><li>Reduce risk </li></ul></ul><ul><ul><li>Increase income </li></ul></ul><ul><ul><li>Unique tradeoffs </li></ul></ul>71
  79. 79. Getting Started C O I
  80. 80. Selecting A Broker <ul><li>Avoid random selection </li></ul><ul><li>Look for a professional </li></ul><ul><ul><li>Referrals </li></ul></ul><ul><ul><li>Interview Branch Manager </li></ul></ul><ul><ul><li>Interview broker </li></ul></ul><ul><ul><li>Firm’s resources </li></ul></ul><ul><ul><li>Full service and discount brokers </li></ul></ul>72
  81. 81. Customer Requirements <ul><li>Understand options papers </li></ul><ul><li>Read disclosure document </li></ul><ul><li>Review trade confirmations </li></ul><ul><li>Review monthly statements </li></ul><ul><li>REMEMBER : </li></ul><ul><li>Know your broker </li></ul><ul><li>Let your broker know you </li></ul><ul><li>Communicate often </li></ul>73
  82. 82. Thank you for attending! Visit the OIC Web site at www.888options.com

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