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Options and Futures

Underlying security

Options are financial derivatives that give the holder the right, but not the obligation, to buy or sell a specific asset at a predetermined price within a certain time period. This underlying asset, also known as the "security," can be a stock, bond, commodity, or currency. When an option holder decides to exercise their right, they are essentially purchasing or selling the security at the agreed upon price. This flexibility is what makes options an attractive tool for investors to manage risk and speculate on market movements.

Related terms

Time-Stamp

Understand the meaning and definition of Time-Stamp in the context of stock market, trading, and investments.

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Hedger

Understand the meaning and definition of Hedger in the context of stock market, trading, and investments.

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Fill-or-Kill

Understand the meaning and definition of Fill-or-Kill in the context of stock market, trading, and investments.

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Price Limit

Understand the meaning and definition of Price Limit in the context of stock market, trading, and investments.

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