3 Questions
What is the strike price?
The price at which the option can be exercised
What is the size of an option contract?
The number of shares of the underlying stock that the option represents
What is the premium?
The price paid for an option
Study Notes
- Options are contracts that give the holder the right, but not the obligation, to buy or sell a stock at a set price on or before a certain date.
- The strike price is the price at which the option can be exercised.
- The expiration date is the date on which the option expires.
- The size of an option contract is equal to the number of shares of the underlying stock that the option represents.
- The premium is the price paid for an option, which is determined by multiplying the strike price by the number of contracts bought.
Test your knowledge of options trading with this quiz covering key concepts like strike price, expiration date, contract size, and premium calculation.
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