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Options Contract

Options Contract Definition

Options Contract is a derivative instrument that gives the holder the right, but not the obligation, to trade a given amount of the underlying asset for a specific price during a specified period of time. The underlying asset can be a stock, commodity, currency, index, or debt, at a specified price (the strike price).


Additional meaning of Options Contract:

Option contracts are exchange-traded instruments. If the option contract is a call option, the option holder receives the right to buy the underlying asset, if the option contract is a put, the holder can sell the underlying upon exercise.








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