Options are one the most versatile trading instruments ever invented.  Since options cost less than stocks, they provide a high leverage approach to trading that can significantly limit the risk of a trade.  Simply, option buyers have rights and option sellers have obligations to the buyers.  Option buyers have the right to buy or sell the underlying stock at a specified price until the third Friday of their expiration month.

There are types of options: calls and puts.  Call options give you the right to buy the underlying asset, whereas put options give you the right to sell the underlying asset.  Before stepping away from  your financial manager, it is important that you get to know the inner workings of both.  Every investment strategy you will have or be given by investment advisers will require your working knowledge of both types of options.

There are no margin requirements if you want to purchase and option because your risk is limited to the price of the option.  In contrast, option sellers receive a credit in their account for selling an option and get to keep this amount if the option expires worthless.  However, option sellers also have an obligation to buy or sell the underlying instrument if their option is exercised by an assigned option holder; therefor selling an option requires a healthy margin.

The price of the option is called the premium.  An option premium is priced on a per share basis and each option on a stock corresponds to 100 shares.  Therefor, if an option premium is priced at 2, that corresponds to 200 shares in the company’s stock.  Yes, this all does sound a bit confusing at first, but if you sit down with a financial adviser and educate yourself with reference material on the subject, you will be better able to make financial decisions on your own.

So much has been written about how tough economic times have forced couples to postpone divorces.  They just can’t afford it.  Legal costs and accountant fees grow as a union dissolves and a two-income household lives cheaper than a two-household pair of singles.  As the economy improves, we will probably see divorce rates creep up.  But even if money woes are keeping couples together, financial disputes remain the root cause of irreconcilable differences.  Here are some common financial issues that can lead to divorce:

Paycheck Envy:  More women are entering marriage with assets of their own and many are earning more than their spouses.  According to the Bureau of Labor Statistics, one in three married women out-earns her husband.  That amount expands to more than half if they earn $55,000 or more.  Men can feel threatened by not having their traditional bragging rights as breadwinners.  For women, it means they have their own money to protect from the irresponsible actions of a mate.  With more at-stake, women can’t afford to be deferential to their mate the way past generations were.

Debt:  Utah State University professor Jeffrey Dew authored a widely cited study that concluded that couples who argue about finances at least once a week are 30% more likely to divorce than those who only vent occasionally about money issues.  Couples with no assets were 70% more likely to divorce compared to couples with assets of $10,000.  Cutting into the ability to build assets is America’s longstanding addiction to credit cards.  The answer: fewer credit cards.

Bills:  As part of a survey last year, Fidelity Investments found that less than half of couples make day-to-day financial decisions together on issues such as budgeting and paying bills.  In many couples, one person always pays monthly bills early while the other might procrastinate until the due date and beyond.  Cutting checks can be even more stressful when an unnecessary shopping spree blows the monthly budget or a mate doesn’t take kindly to the premium cable channels or costly text messages their better half piles into the mix.

Investing:  One can assume that investment decisions are increasingly dividing couples if both partners are financially savvy.  Risk tolerance may be incompatible, with goals out-of-synch.  Looking over an investment portfolio or 401(k) plan, one spouse may want to explore emerging market funds, while the other dismisses anything but safe domestic large caps and bonds.

Secret Stash:  Financial infidelity is a newly coined term that describes situations in which a spouse hides cash or credit from his mate.  It may seem a good idea to have a secret credit card or bank account that you can dip into, but your partner will probably take great offense at the covert action.  Beyond the financial dishonesty on display, such hidden reserves may be a warning sign of even bigger transgressions.

Options are one the most versatile trading instruments ever invented.  Since options cost less than stocks, they provide a high leverage approach to trading that can significantly limit the risk of a trade.  Simply, option buyers have rights and option sellers have obligations to the buyers.  Option buyers have the right to buy or sell the underlying stock at a specified price until the third Friday of their expiration month.

There are types of options: calls and puts.  Call options give you the right to buy the underlying asset, whereas put options give you the right to sell the underlying asset.  Before stepping away from  your financial manager, it is important that you get to know the inner workings of both.  Every investment strategy you will have or be given by investment advisers will require your working knowledge of both types of options.

There are no margin requirements if you want to purchase and option because your risk is limited to the price of the option.  In contrast, option sellers receive a credit in their account for selling an option and get to keep this amount if the option expires worthless.  However, option sellers also have an obligation to buy or sell the underlying instrument if their option is exercised by an assigned option holder; therefor selling an option requires a healthy margin.

The price of the option is called the premium.  An option premium is priced on a per share basis and each option on a stock corresponds to 100 shares.  Therefor, if an option premium is priced at 2, that corresponds to 200 shares in the company’s stock.  Yes, this all does sound a bit confusing at first, but if you sit down with a financial adviser and educate yourself with reference material on the subject, you will be better able to make financial decisions on your own.

There are simple things you may be doing that are easily delaying your retirement by years.  Daily financial decisions that you make can directly impact your future, so poor financial habits will keep you working longer.  Keeping up with the Joneses is probably one of the worst “habits” you can have.  Having the latest and greatest items may make you very happy now, but when you are stuck working an extra 5-10 years, you probably won’t be too pleased.  Its simple, just live within  your means.  Set a budget for yourself and stick to it.

Three of the most expensive habits, that are only going to continue to get more expensive, are smoking, drinking, and gambling.  The odds of hitting the jackpot in the lottery are very slim.  Instead of spending all that money on tickets, why not put it into an interest bearing account and let it compound; a guaranteed win.  A glass of wine may lengthen your lifespan (according to medical research), but if you haven’t saved enough money for that longer life, you will run into problems.

Track how much money you are REALLY spending on entertainment.  Entertainment is a huge pitfall for budgets because most of the spending is unplanned.  How often do you go back and see how much money you spent at the bar, restaurant, club, or movies.  Too often we let these expenditures go untracked and then when our paycheck is gone, we have no idea where it went.  The best thing is to just make smart decisions.  Bring cash when you go out so you can track exactly what you are spending.  Set a budget for yourself and stick to it.  All that money you are no longer spending on daily “habits” can add up in the end and it can help get you to an early retirement.  If you choose to spend those funds, by all means speak to a financial adviser and choose to invest in appreciable assets.