Learn about Options Contracts and how they relate to the markets and options trading.
An options contract is a contract between two parties that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date. The seller of the contract is obligated to sell or buy the asset if the buyer chooses to exercise this right. The three main parts of an options contract are the strike price, the expiration date, and the transaction (buy or sell).