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).

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 how to buy stock options basics

: One standard options contract typically controls 100 shares of the underlying stock. : This is the "fee" you pay upfront to own the contract

: The pre-agreed price at which you can buy or sell the stock. but not the obligation