What is Option?
An option is a contract that gives its holder the right, but not the obligation, to buy or sell an underlying asset at a set price before or at a set date. The two basic types are calls and puts. Options are leveraged and can expire worthless, so the buyer can lose the entire premium paid, and this is an introduction to the idea rather than guidance on using them.
Why Option matters
Options are a large and complex corner of markets, and even a basic grasp helps you read what other traders are doing.
Related terms
Lessons that use this term
Continue