A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- OptionsContracts that give you the right, but not the obligation, to buy or sell an investment at a set price by a deadline.
- Call OptionA contract giving you the right to buy an investment at a set price before it expires.
- Put OptionA contract giving you the right to sell an investment at a set price before it expires.
- Expiration DateThe deadline by which an option contract must be used or it becomes worthless.
- LeverageUsing borrowed money to increase the size of an investment, raising both potential returns and potential losses.
- StockA share of ownership in a company that you can buy and sell, giving you a small stake in its profits and growth.
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Plain-English education — not personalized legal, tax, or investment advice.