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Changes in an equity market price

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An investor can profit on changes in an equity's market price without ever having to actually put up the money to buy the equity. The premium to buy an option is a fraction of the cost of buying the equity outright. Additionally, in buying options, risk is limited to the premium paid for the option - no matter how much the actual stock price moves adversely in relation to the strike price.

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Reference no: EM131504427

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