Buying options gives you the , but not the obligation , to buy or sell a stock at a specific price within a set timeframe. It’s essentially a contract where you pay a fee (the premium ) to "reserve" a price (the strike price ) for a set period (until the expiration date ). The Two Core Types of Options
: You buy these when you think a stock price will rise . buying options for dummies
They give you the right to 100 shares at the strike price. Buying options gives you the , but not
They give you the right to 100 shares at the strike price. They give you the right to 100 shares at the strike price
If the market price goes above your strike price, you can buy the stock at a "discount" or sell the contract for a profit.
If the market price drops below your strike price, the value of your put increases because you can sell the stock at a price higher than the current market rate. Essential Lingo Options Trading for Beginners (The ULTIMATE In-Depth Guide)