List of Financial Market Terms

An option acts as a contract sold by an option writer to an option holder. This contract gives the buyer the choice to call (buy) or put (sell) a stock at a predetermined stock during a predetermined time frame

Call options give you the right, but not the obligation, to buy a stock at a specified price (strike price). Therefore, the buyer of a Call would want the stock to go up.

Put options give you the right, but not the obligation, to sell a stock at a specified price (strike price).  In this case the buyer of a Put would want the stock to go down.

Related terms: Iron Condor, Calendar Spread, Put Option, Call Option

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