Options are contracts giving the purchaser the right to buy or sell a security, such as stocks, at a fixed price within a specific period of time. Stock options are traded on a number of exchanges, including:
Before trading in options, you should educate yourself about the various types of options, how basic options strategies work, and the risks involved. If you have a question about options, you can contact the Options Industry Council at 1-888-OPTIONS (1-888-678-4667) or visit its Getting Started web page. On the OIC website, you can also read a number of publications, including the "Characteristics and Risks of Standardized Options" booklet.