What Is an Option Contract?

The Automated Trading Podcast by Advanced AutoTrades

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This episode explains that an options contract is a legally binding agreement between a buyer and a seller. This contract grants the buyer the right, but not the obligation, to either buy (in the case of a call option) or sell (in the case of a put option) an underlying stock at a predetermined price (the strike price) by a specific future date (the expiration date). The hosts use analogies, like a coupon, to clarify the concept and emphasizes that options were initially created as a tool for managing risk in trading.

We help retail traders set up automated options trading to grow their accounts.
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On this podcast you will find tips, tricks, and guides on how to grow your auto trading account with low-risk per-trade option spreads strategies.
We will show you what you need to know and what actions you need to take.
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The content on this channel is for educational purposes only. Advanced Autotrades IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Neither Advanced AutoTrades nor any of its owners or employees is registered as a securities broker-dealer, broker, investment advisor (IA), or IA representative with the U.S. Securities and Exchange Commission or any state securities regulatory.