: The fixed price at which the option allows you to buy or sell the stock.
Options are contracts that give you the , but not the obligation, to buy or sell 100 shares of an underlying stock at a set price by a specific date. how to buy options in stock market
: You buy these if you expect the stock price to fall . They grant the right to sell the stock. : The fixed price at which the option
: This is the price you pay to purchase the option. It is quoted per share, so a $2.00 premium actually costs $200 per contract (100 shares x $2.00). They grant the right to sell the stock
: The date the contract becomes void. If the stock hasn't moved as expected by this date, the option may expire worthless, and you lose the premium paid. 2. Preparing to Trade