Learn how option premiums are determined by factors like stock price, time to expiration, and volatility. Master the basics to trade options wisely and confidently.

Kesavan Balasubramaniam is a freelance writer who covers a wide array of investing topics, including retirement, FX trading, and small business. Thomas J Catalano is a CFP and Registered Investment ...

When it comes to options, strike prices are key in determining the value of an option and the potential for profit or loss. The strike price is the price at which the underlying asset, such as a stock ...

An option premium is the fee that the buyer of an option contract pays for the right to buy or sell stocks or other securities at a pre-set price when the contract’s time limit expires. From the ...

What is a Put Option? A purchase of a put option allows you the right to sell the underlying at a strike price. You can use puts to protect a long position from a price decline, but you can also use ...

What Is a Call Option? A call option is a contract that gives the buyer of the option the right to purchase a security, such as a specific stock, at a specific price (referred to as the strike price).

Selling puts is an oft-overlooked option trade that can pair well with long-term investing strategies under certain circumstances. Many, or all, of the products featured on this page are from our ...

A put option is a financial contract that provides an investor the right (but not obligation) to sell a stock at a designated price prior to an expiration date. Learn more about put options and how ...

A stock option is a contract that gives you the right to buy or sell a stock at a certain price in the future. Stock options can be used to hedge against potential losses in your portfolio. Employee ...

What will a stock be worth at a future date? Buying a call option bets on “more.” Selling a call bets on “less.” Here are 3 examples of call options trading. Many, or all, of the products featured on ...

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