Neil, can't agree with abolishing call/put options as they are...

Neil, can't agree with abolishing call/put options as they are useful tools for protecting portfolios.
Furthermore they are regulated very well IMHO.
They do not work on a margin principle.
If you buy options you must pay the whole amount up front. ETO'S (exchange traded options) do not have an influence on the physical share price like short selling and CFD's.
All they are is a contract to buy or sell a share at an agreed price within a specified time period.
I would be very afraid if the powers that be abolished the ETO market.......If you own the share, but know that it will probably go down, you can buy puts to hedge your long position. That way you can take advantage of dividends etc.
If you take that away - guess what? People will have to sell their shares and this would cause much more damage to the share price.......


Commy



Moved from the "United States" forum. Original message number: 1157