Option

A privilege sold by one party to another that offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security at an agreed-upon price during a certain period of time or on a specific date.


Options are extremely versatile securities that can be used in many different ways. Traders use options to speculate, which is a relatively risky practice, while hedgers use options to reduce the risk of holding an asset.



Options Basics Tutorial - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them.

Trading A Stock Vs Stock Options - Part One - Interested in learning more about these derivatives? We go over some basic terminology and the source of profits.

Trading A Stock Vs Trading Stock Options - Part Two - Interested in learning more about these derivatives? We go over some of the factors affecting their price.
Related Terms

American Option

Call

Derivative

Embedded Option

Employee Stock Option (ESO)

European Option

Index Option

Intrinsic Value

LEAPS

Leverage

Max Pain

Option Chain

Options Contract

Put

Spread

Strike Price

Time Value

Writer

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