please to "briefly" rewrite these sentences. doesnt need to be long, just briwfly doesnt nees to be bullets point like that........

3:12 1 chegg.com Disadvantages: Lower liquidity. Many individual stock options don't have much volume at all. The fact that each optionable stock will have options trading at different strike prices and expirations means that the particular option you are trading will be very low volume unless it is one of the most popular stocks or stock indexes. This lower liquidity won't matter much to a small trader that is trading just 10 contracts though. Higher spreads. Options tend to have higher spreads because of the lack of liquidity. This means it will cost you more in indirect costs when doing an option trade because you will be giving up the spread when you trade Higher commissions. Options trades will cost you more in commission per dollar invested. These commissions may be even higher for spreads where you have to pay commissions for both sides of the spread. Complicated. Options are very complicated to beginners. Most beginners, and even some advanced investors think they understand them when they don't. Time Decay. When buying options you lose the time value of the options as you hold them. There are no exceptions to this rule .Less information. Options can be a pain when it is harder to get quotes or other standard analytical intorharior - n like the implied volatility .Less information. Options can be a pain when it is harder to get quotes or other standard analytical information like the implied volatility Options not available for all stocks. Although options are available on a good number of stocks, this still limits the number of possibilities available to you. Recommendation: Use Option contracts Reason: Forwards allow the importer to eliminate the risk of having to buy Japanese yens by exchanging more Dollars on account of the depreciating dollar However, if the dollar appreciates, the importer will stand to lose. This is because he would be obligated to buy Japanese yens by exchanging Dollars at the predetermined rate and would be unable to exchange dollars for Japanese yens at the prevailing favorable exchange rate. This disadvantage can be overcome by buying a call option that would give the importer the right to buy the currency at a rather than obligate him to do so. American call options allow the purchase of currency at the predetermined contract price on or before the expiry of the contract. European options, on the other hand, allow the purchase of currency only on the expiry of the contract Was this answer helpful? 0 Questions viewed by other students