Stock options represent the right (but not the obligation) to purchase stock in a company. A standard stock option contract represents 100 shares of the underlying stock. These contracts last for a ...

Because each option covers 100 shares of stock, you would earn $123 for selling one “contract” of these calls. Etrade Each transaction has a buyer and a seller.

Typical options contracts are good for 30, 60 or 90 days, but some can have expiration dates of up to a year. The further out the options contract’s expiration date, the higher the premium will be.

Investors who sell options contracts make their money off contract premiums that the buyer pays. As long as the buyer doesn't exercise their contract, or if they exercise it for less than what ...

There are now about 40 million options contracts traded every day, up from just 15 million contracts in 2010 and less than 2 million contracts in 1999, according to Nasdaq. Related: Sign up for ...