Buying And Selling Stock Options May 2026

Buying and selling stock options is a versatile way to trade market movements with and defined risk . Unlike owning a stock outright, an option is a contract that gives you the right , but not the obligation , to buy or sell a stock at a specific price ( strike price ) by a certain date ( expiration ). The Core Contract Types

There are two primary types of options, which function differently depending on whether you are the buyer or the seller: buying and selling stock options

You expect the stock price to fall . It grants the right to sell 100 shares at the strike price, acting like insurance. Buying and selling stock options is a versatile