What Is a Stock Option? A stock option is a contract giving its holder the right, but not the obligation, to buy or sell a stock at a given price before a specific date. There are two main types of ...

Index options offer access to a market with more liquidity. Index options offer cash settlements. Stock options offer inexpensive price options. Index options only offer a few choices that are ...

Start with simple definitions before discussing numbers. A stock option gives an employee the right to buy company shares later at a fixed price called the strike price. Clarify that options are not ...