• Stock options give the trader the right, but not the obligation, to buy or sell shares of certain shares at an agreed price and on an agreed date.
  • Stock options are a common form of derivative capital.
  • One share option contract typically represents 100 shares of the underlying asset.
  • There are two main types of option contracts: calls and puts.
  • Employee stock options (ESO) is when a company actually grants call options to certain employees.