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Option explained.

A contract granting a buyer specified rights concerning an underlying asset, a strike price, and a time period. A seller accepts corresponding obligations under the contract’s terms.

Options

Option

A contract granting a buyer specified rights concerning an underlying asset, a strike price, and a time period. A seller accepts corresponding obligations under the contract’s terms.

Example: A call concerns a right to buy; a put concerns a right to sell.

Watch for: Learning a strategy name before understanding the contract’s terms and risks.

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