An options contract is a derivative security that grants its owner the right to buy or sell a certain amount of a stock or asset at a certain price on or before a specific date. Because options ...

it's critical to start with a basic definition of options. These derivatives are contracts that allow the holder to buy or sell shares of the underlying asset at a specific price by a specific date.

Formally, options are contracts between two parties that give buyers the right but not the obligation to purchase or sell a predetermined number of shares of an underlying asset at a specific ...

There are now about 40 million options contracts traded every day, up from just 15 million contracts in 2010 and less than 2 million contracts in 1999, according to Nasdaq. Sign up for stock news ...

An option's strike price is the price at which the contract's underlying assets may be sold (in the case of a put option) or purchased (in the case of a call option) by the option contract's owner.

That's the short summary of these options contracts. Now, let's take a closer look at how call and put options work, as well as the risks involved with options trading. A call option is a contract ...