What Is a Stock Option?
A put gives the right, not the obligation, to sell shares.
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1.What does a call option give its buyer?
A put gives the right, not the obligation, to sell shares.
2.What is the premium of an option?
Strike, expiration and premium are the three terms on every option.
3.Leo buys a call, strike 50, premium 2, for 100 shares. What does he pay up front?
A standard contract covers 100 shares, so 2 times 100 is 200.
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Sources (3)
- FINRA, Options (Investor page: Calls, Puts, Strike Price, Premium, Intrinsic and Time Value, Risks)
- IRS, Topic no. 427, Stock options (Page Last Reviewed or Updated: 24-Sep-2026)
- Eigene Rechnung: Leo kauft einen Call (synthetisch)
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Education only. Not financial advice.