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What is a option?

In: Investing and Financial Markets [Edit categories]

Answer:

An option grants the holder the right but not the obligation to buy or sell the underlying stock at a fixed price by a fixed date.

As options only cost a fraction of the price of the underlying stock, it is commonly used as a speculative leverage instrument.

First answer by Jasonnoguchi. Last edit by Jasonnoguchi. Contributor trust: 14 [recommend contributor ]. Question popularity: 2 [recommend question].

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