Introduction
Investing in the stock market can be an exciting and potentially profitable venture. However, it can also be complex and overwhelming, especially for new investors. One investment strategy that often perplexes newcomers is stock options. In this article, we will provide a comprehensive overview of stock options, explaining what they are, how they work, and the potential benefits and risks associated with them.
What are Stock Options?
Stock options are financial contracts that give the holder (buyer) the right, but not the obligation, to buy or sell shares of a specific stock at a predetermined price (strike price) within a certain period of time. They are often used as a form of compensation for employees in publicly traded companies, but they are also available for individual investors to trade in the open market.
