Options contract

An options contract gives the buyer the right, not the obligation, to buy (call) or sell (put) at a strike before expiry, for a premium. The buyer can lose only the premium; the seller can lose far more. The Module 0 quiz tests the two common mistakes, US options trade on Cboe, which also runs the VIX, and the chain is a read of what the market expects.

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  • CboeCboe is the Chicago-based exchange group that runs the largest US options market and four US stock exchanges grown out…
  • Call optionA call option is the right to buy at the strike before expiry. Strike 24,200 and premium 80 means profit only above…
  • Futures contractA futures contract is an exchange-traded agreement to buy or sell at a set price on a set date, settled daily against…
  • Option open interestOption open interest is the number of option contracts that exist at a strike right now, free on any option chain. The…
  • Put optionA put option is the right to sell at the strike before expiry, so it gains when the price falls: insurance on a…
  • Volatility / VIXVolatility is how much a price swings. The VIX is Cboe's index of how far the S&P 500 is expected to move over thirty…

Educational content only. Not investment advice. Leveraged products magnify losses as well as gains.

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