Options (calls & puts)
An option is a contract giving the right — but not the obligation — to buy or sell a stock at a set price by a set date; the two basic types are calls and puts.
An option is a derivative contract tied to an underlying stock. It grants the holder the right, but not the obligation, to buy (a call) or sell (a put) 100 shares at a fixed "strike" price on or before an expiration date, in exchange for an upfront premium. Because a small premium controls a larger position, options offer leverage — and with it, magnified risk.
Investors use options to speculate on price moves, to generate income, or to hedge existing holdings. They are complex instruments: an option can expire completely worthless, and some strategies (especially selling options) carry very large or theoretically unlimited losses. They are widely considered unsuitable for beginners without careful study.
stocks-llm is a tool for researching companies for the long term, not an options platform — it does not price, screen, or track options. This definition is educational only and is not a recommendation to trade options.
See more terms in the stocks-llm glossary.
Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.