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| OCT 1986
SIDEBAR: The basics by Technical Analysis, Inc.
SIDEBAR: The basics by Technical Analysis, Inc. There is a special vocabulary of options trading that must be mastered in order to understand the uses of options and communicate with brokers and other option traders. An option is a legal contract that gives the holder the right to buy or sell a specified amount of the underlying asset at a fixed or determinable price (called the exercise or strike price) upon exercise of the option. Options that can be exercised at any time before they expire are sometimes called American options. They are to be distinguished from European options, which can be exercised only during a specified period immediately before expiration. Almost all listed options that trade in the United States are of the American type.
by Technical Analysis, Inc.
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