Options Trading 101: Stock Options Trading Basics

Options Trading 101: Stock Options Trading Basics

Options Trading 101: Stock Options Trading Basics I firstly remind below the basics of Options for the rest of the article to make sense for the readers who do not have opinions about Options. There are numerous underlying assets that can be traded as an option contract from stocks to FX products, from equities to commodities and many more. In this article, I summarized the basic concepts of stock options trading.  An Option is a contract allowing the recipient the right, but not the obligation to transact a known transaction (buy or sell) of a known asset at a known price in a known pre-defined time frame.  Options that can be exercisable at any time during the time period are called “American Options”.  Options that can be exercised only at the end of the period are “European Options”. Other important characteristics of Options:Expiration Date: The date an option’s final value is determined and can no longer be traded. Stocks typically have options with...
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