Options Trading: What is an OPTION?

Option is a security, just like a stock or bond, and constitutes a binding contract with strictly defined terms and properties

Option is Contract. Options offer the owner the right to buy or sell an asset for a specific period of time at a fixed price (known as the "strike price").

Depending on the option contract, the period of time could be as little as a day or as long as a few years. If and when the option contract's owner exercises his or her right to buy or sell it, the op…