The information contained herein is subject to change without notice.
Please also read the Terms and Conditions and Disclaimer of Liability which are incorporated herein by reference.
Options involve risk and are not suitable for all investors
The content we publish is, to the best of our knowledge, valid to the extent of our resources and information-gathering mechanisms. The content is distributed uniformly to all subscribers and no specialized, personalized or individual financial advice is given to any one subscriber or sub-group of subscribers. We cannot assure you that the information is precise or absolute. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Only you can determine what level of risk is appropriate for you. We urge you to seek advice from your professional financial planner/advisor and to make independent investigations before acting on information that we publish. We do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.
We encourage our subscribers and non-subscribers to invest carefully and to utilize the information available at the web sites of the Securities and Exchange Commission and the Financial Industry Regulatory Authority. You can review public companies' filings at the SEC's EDGAR page. FINRA has published information on how to invest carefully at its web site.
Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies of this document are available at The Options Clearing Corporation or from your broker. Copies are also available at The Options Clearing Corporation, 440 S. LaSalle Street, 24th Floor, Chicago, IL 60605 or the Chicago Board Options Exchange, 400 S. LaSalle Street, Chicago, IL 60605. The documents available discuss exchange-traded options issued by The Options Clearing Corporation and are intended for educational purposes. No statement in the documents should be construed as a recommendation to buy or sell a security or to provide investment advice. Neither of the above links implies that The Options Clearing Corporation nor the Chicago Board of Options Exchange endorses CounterVest.com, its parent company or its affiliates.
Options behavior in a falling or rising market
In a falling or rising market, it is possible that a option may not change in value at the same rate as the underlying security due to the remaining time value.
Other important information regarding the content on this site
Any pricing or potential profitability shown does not take into account your trade size, brokerage commissions or taxes, which will affect actual investment returns. Investment examples and comments presented are based solely on our personal research and opinions. Investors should be cautious about any and all stock or option recommendations. All investors are advised to conduct their own independent research into individual stocks or indexes before making a purchase decision. In addition, investors are advised that past stock, index or option performance is no guarantee of future price appreciation or depreciation. Subject to the section entitled "Trading by CounterVest.com Personnel" included in the Disclaimer of Liability, those involved with the preparation and distribution of this web site may have had in the past, may currently hold, or may purchase in the future stock and/or options in companies or indexes discussed in this web site.
In considering whether to trade, you should be aware of the following points:
The national securities markets are extremely efficient and competitive. Successful trading typically requires skill and discipline as well as experience and knowledge of the capital markets. There is no guarantee that you will be successful in implementing your investment strategy. A substantial number of traders will not be successful. Moreover, changes in market structure and competitive conditions also may affect your continued success. Only risk capital should be used for trading. Market structure and competitive changes in the markets may cause formerly successful traders to become less successful. Trading can involve a volume of activity. Each trade generates a commission and the total commissions on such trading can be in excess of any earnings. Persons who are new to trading should strictly limit both the number of trades they do and the size of their trades to reduce the risk of large dollar losses during the learning process. Trading activity may result in losses that can exceed 100% of your initial capital. You are solely responsible for any losses in your account. Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders. Similarly, using “market orders” can be very risky, since large gaps can occur in price movements of active stocks. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to system failures. The firm and its clearing broker rely upon sophisticated computer software and hardware to execute transactions, which are subject to failure due to a variety of factors. Among other events, you may experience losses due to: system crashes during both peak and low volume periods; the loss of orders and, delayed, conflicting and inaccurate confirmations on orders or cancellations that you initiate. The use of any margin or leverage in an account can work against you as well as for you. Leverage can lead to large losses as well as gains. You may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain a position, and you may incur losses beyond your initial investment. If the market moves against your position, you may be called upon to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you do not provide the required funds within the time required, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account. You should consult your broker concerning the nature of the protections available to safeguard funds or property deposited in your account.
ALL OF THE POINTS NOTED ABOVE APPLY TO BOTH STOCK AND OPTION TRADING OF DOMESTIC EQUITY SECURITIES. THE RISK OF DAY TRADING AND/OR OPTION TRADING MAY BE SUBSTANTIAL. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER ASPECTS OF TRADING. ONLY RISK CAPITAL SHOULD BE USED FOR TRADING.