Eli5: what are options in stock trading?
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Options are a type of contract that give you the option to buy or sell shares at a specific price. Eg you can buy 100 shares of Tesla at 50$ regardless of the current price on the stock market. You can then go and sell it on the market for a profit. It’s basically a contract between you and someone else to buy their shares for a certain price. You have to purchase options so it costs you money to buy them and there’s an expiry date on them as well.
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