Trading financial derivatives contracts. Play Options Trading trivia solo to sharpen your knowledge, or challenge a friend head-to-head in Trivia Tango — every question comes with an explanation so you learn as you play.
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This type of contract gives the holder the right—but not the obligation—to purchase shares at a predetermined price before expiration.
This type of contract gives the holder the right to sell shares at a specified price, often used as portfolio insurance.
The upfront cost paid to acquire an options contract is known by this term, similar to what you'd pay for insurance coverage.
This predetermined level at which an option holder can buy or sell the underlying asset remains fixed throughout the contract's life.
After this deadline, an options contract becomes worthless if not exercised, representing the final moment for the holder's decision.
When an option holder decides to use their contractual right to buy or sell shares, they are said to do this action.
Standard equity options in the U.S. typically represent this many shares of the underlying stock per contract.
The party who creates and sells derivative contracts, taking on the obligation if the buyer exercises, holds this market role.