MoneyAccumulator.com

by Das Brain

Before I move on to the topic of “What are put option contracts?” which is Part 3 of this “Intro To Option Trading” series, I want to quickly write about how to read option quotes for a particular underlying stock or equity, by knowing how to read the quotes you will get better idea of what to look for when buying and selling option contracts.

by Das Brain

What are call option contracts?

This is going to be a more general description of what call contracts are. First of all, let’s talk about what is common amongst all option contracts whether they are calls or puts. All option contracts you purchase have a strike price and expiration date.

What is the strike price?

by Das Brain

This is just an introduction to trading option contracts.

First of all what the heck is an option contract?

An option is a contract which gives you the right to buy or sell a particular stock or equity. The stock or equity is known as the option’s underlying instrument. For stock or equity options, the underlying instrument is a stock, exchange-traded fund (ETF), or similar product. The contract itself sets a specific price, called the strike price, at which the contract may be exercised, or acted upon. The option contract also has an expiration date. When the option contract expires, it no longer has value and will no longer exists.