When you purchase an options contract, you're purchasing the right to buy or sell a stock (or other security) at a set price. Many, or all, of the products featured on this page are from our ...

An options contract’s premium is its market price. In other words, it’s how much an option buyer pays an option seller for an option contract. Options are sold in groups of 100 shares, and a premium ...

Option margin is the cash or securities an investor must deposit in their account as collateral before writing—or selling—options. Margin requirements are established by the Federal Reserve Board in ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Thomas J. Brock is a CFA and CPA with more than ...

Here is a contrarian idea to consider in the financial sector using options to help define and limit the risk: Interactive Brokers Group, Inc. (NASDAQ:IBKR) 24.19. a Greenwich, Connecticut based IB ...

In options trading, a "strangle" refers to an options position that consists of both a call and a put option on the same underlying stock, with the contracts having identical expirations but differing ...

A naked or uncovered option is a call (or put) written without the offsetting shares (or funds) necessary to fulfill the terms of the contract should it be exercised by its buyer. A naked or uncovered ...