TRADING GLOSSARY
Options contract
An options contract gives its buyer the right, but not the obligation, to buy or sell an underlying asset at a specified strike price within a defined period or at expiry. The buyer pays a premium, while the seller must fulfil the contract if assigned.
EXAMPLE
In a hypothetical example, a call option allows its buyer to purchase an asset at the strike price; the buyer may instead let it expire.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure