Options Basics: How Options Work

Options are part of a larger class of financial instruments known as derivative products , or simply, derivatives. Once Jack and Jane enter into a contract for the sale of Whiteacre, Jack can assign his contract rights to Joe. The broker you choose to trade options with is your most important investing partner. The stock price listed in the contract is called the " strike price. Screening should go both ways. When you buy a stock, you decide how many shares you want, and your broker fills the order at the prevailing market price or at a limit price.

BREAKING DOWN 'Options Contract' For example, a trader holding shares of a company with a current price of $50 might sell a call option with a strike price of $55 to generate income in the form of option premiums, paid by a buyer speculating on share price appreciation far above the strike price.

What it is:

The American Journal of Clinical Nutrition in 2004 published a systematic review of meta-analyses and clinical trials on dietary supplements for weight loss by complementary medicine researchers at the Universities of Exeter and Plymouth.

None of the over-the-counter weight loss aids worked, including garcinia cambogia. Late in 2010 the peer-reviewed Journal of Obesity published a meta-analysis of studies testing the garcinia as a weight loss aid.

Of the 23 trials they identified, 12 were methodologically sound enough to include in their analysis. The analysis revealed that some statistically significant weight loss occurred, but the magnitude of the effect is small and the clinical relevance is uncertain.

Use option contract in a sentence

An option is the potential to participate in a future price change. So, if you own a call, you can participate in the uptrend of a stock without owning the stock. You have the option to participate. In terms of valuing option contracts, it is essentially all about determining the probabilities of future price events. Each contract entitles the option buyer/owner to shares of the underlying stock upon expiration. Thus, if you purchase seven call option contracts, you are acquiring the right to purchase shares. For every buyer of an option contract, there is a seller (also referred to as the writer of the option). An options contract is an agreement between a buyer and seller that gives the purchaser of the option the right to buy or sell a particular asset at a later date at an agreed upon price. Options contracts are often used in securities, commodities, and real estate transactions.