When you buy an option, your risk is strictly limited to the premium you paid.
: This is the price you pay (as a buyer) or receive (as a seller) for the option. 2. Buying Options (Going "Long") buying selling options puts calls
: Give the buyer the right to sell an asset at the strike price by expiration. When you buy an option, your risk is
Buying and selling options involves two primary types of contracts: and puts . These allow you to speculate on price movements or protect existing investments with more flexibility than traditional stock trading. 1. The Core Mechanics Buying Options (Going "Long") : Give the buyer
: Give the buyer the right to buy an asset at a set price ( strike price ) by a specific date ( expiration ).
: One standard equity option contract typically represents 100 shares of the underlying stock.