Using an Options Margin Calculator: Everything You Need to Know

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If you’ve been looking to learn the ins and outs of purchasing stocks, you may have come across a type of contract known as an option. Options contracts represent a stock investment strategy that involves a measure of "betting" on the decline or rise in price of a certain stock — and securing the right to purchase or sell shares when a stock reaches a particular price. But rather than acting solely on predictions when making this type of stock purchase, investors have a reliable tool that can remove some of the uncertainty and simplify the decision-making process.

Options margin calculators help compile a number of important details and process these data into a total estimated cost for one or many options contracts. Investors who utilize these online tools have the advantage of using clear data to guide their decisions, effectively increasing their likelihood of investing in stocks that’ll potentially have higher returns (or knowing when it’s better to sell off a stock). Before you call up your broker or open an online trading platform, learn more about how an options margin calculator can help you make better-informed investment decisions.