• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Option Contracts

Stock options are traded in contracts, not as individual derivative units. Each contract will represent a certain number of units of the underlying asset. This number is different for different types of assets worldwide. US stock option contracts represent 100 shares of the underlying stock, and UK stock option contracts represent 1,000 shares of the underlying stock.

Therefore, when you see a US equity call option price of, say, $1.45, you will have to pay $1.45 × 100 for just one contract. One contract is the minimum amount you can trade, and for US equity options, one contract represents 100 individual shares. In other words, by paying $145.00 you now have the right to buy 100 shares of the stock.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint