Category : Business » Stock Trading
. example, to own 100 shares of a stock trading at $50 per share would cost $5,000. . stock investors, have the ability to follow price movements, trading .
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Business
Stock Trading
Content Summary :
A stock option is a contract which conveys to its holder the right, but not theobligation, to buy or sell shares of the underlying security at a specified price on orbefore a given date. After this given date, the option ceases to exist. The seller of anoption is, in turn, obligated to sell (or buy) the shares to (or from) the buyer of theoption at the specified price upon the buyer's request.Options are currently traded on the following U.S. exchanges: The American StockExchange, Inc. (AMEX), the Chicago Board Options Exchange, Inc. (CBOE), the NewYork Stock Exchange, Inc. (NYSE), The Pacific Stock Exchange, Inc. (PSE), and thePhiladelphia Stock Exchange, Inc. (PHLX). Like trading in stocks, option trading isregulated by the Securities and Exchange Commission (SEC).The purpose of this publication is to provide an introductory understanding of stockoptions and how they can be used. Options are also traded on indexes (AMEX, CBOE,NYSE, PHLX, PSE), on U.S. Treasury securities (CBOE), and on foreign currencies(PHLX); information on these option products is not included in this document but canbe obtained by contacting the appropriate exchange (see pages 40 and 41 for addressesand phone numbers).