Eli5: what is a buy and sell option trade, could anyone explain this clearly?
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The true ELI5 answer is that it the answer is entirely in the name: OPTION. Options are contracts where the person paying for the contract has the OPTION of executing the contract (to buy or sell something) prior to the option expiration (options have a date in the future when the contract ends – the buyer can’t exercise their OPTION after that date). The buyer can choose whether or not they want to execute the contract – it is their OPTION.
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