Lesson 1 / 4 · 5 min · take your time
A contract, not a cheaper share
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Board 01
A contract, not a cheaper share
A stock option is a contract about a , not a slice of the company. A is the right to buy 100 shares at a before expiry. A is the right to sell 100 shares at that strike. You pay a for that right. If you never use it, the premium can go to zero.
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A stock option is a contract about a , not a slice of the company. A is the right to buy 100 shares at a before expiry. A is the right to sell 100 shares at that strike. You pay a for that right. If you never use it, the premium can go to zero.
People talk about options as ‘cheap AAPL.’ That is the trap. Paying $12 for a 230 is not the same as owning Apple at $12. The call can expire worthless even if Apple is still a large company. The does not expire.
On this desk one contract multiplies by 100, like a live equity option. A $12 costs $1,200 in . We do not sell live contracts. There is no OCC account here.
See it on the board: Apple call 230
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