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Option Trading with Professionals

106
Options are financial contracts that give the holder the right (but not the obligation) to buy or sell a financial instrument (like stocks, funds, commodities, or indexes) at a specific price within a certain time frame.

There are two main types of options:

Call options: Give the right to buy the underlying asset.
Put options: Give the right to sell the underlying asset.

Options derive their value from an underlying asset, and a stock option contract typically represents 100 shares of the underlying stock.

Key Features of Options:

Strike Price: The price at which an option can be exercised.
Expiration Date: The date at which an option expires and becomes worthless.
Option Premium: The price at which an option is purchased.
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