How To Buy Stock Options Basics -

: This is the "fee" you pay upfront to own the contract. If you see a premium of $2.50, the actual cost is $250 ($2.50 × 100 shares).

: The "due date" for the contract. After this date, the option becomes void and worthless. how to buy stock options basics

: The pre-agreed price at which you can buy or sell the stock. : This is the "fee" you pay upfront to own the contract

A Beginner's Guide to Buying Stock Options Stock options are financial contracts that give you the , but not the obligation , to buy or sell a stock at a set price before a certain date. While they offer powerful benefits like leverage and risk management, they are more complex than simply buying shares. Core Concepts You Must Know After this date, the option becomes void and worthless

: One standard options contract typically controls 100 shares of the underlying stock.