Introduction to stock options

Stock option contract is a standardized contract formulated by the exchange, which stipulates that the buyer has the right to buy or sell the agreed stocks or track the stock index at a specific time in the future.

An option is a contract between the two sides of a transaction about the right to buy and sell in the future. As far as individual stock option is concerned, the buyer (right party) of the option obtains a kind of right by paying a certain fee (royalty) to the seller (obligatory party), that is, the right to buy or sell a specified number of shares or ETFs from the option seller at the agreed time and price. Of course, the buyer (the right party) can also choose to give up the right to exercise. If the buyer decides to exercise his rights, the seller is obliged to cooperate.

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