Optionable Stock

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DEFINITION of 'Optionable Stock'

A stock that has options trading on a market exchange. Not all companies that trade publicly have exchange traded options, this is due to requirements that need to be met, such as minimum share price and minimum outstanding shares.

BREAKING DOWN 'Optionable Stock'

This allows investors to purchase options on the underlying stock, giving them the right to buy or sell shares of the optionable stock at a set price. The easiest way to check whether a stock is optionable is to go to the Chicago Board Options Exchange website and check whether there are options listed for a particular stock.

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RELATED FAQS
  1. How can I find out which stocks also trade as options?

    The trading of options has become increasingly popular among retail investors as they become aware of the many different ... Read Full Answer >>
  2. What requirements must a company meet for options to be traded on its stock?

    Companies must meet four criteria before options on their stock can be traded on options exchanges: The underlying equity ... Read Full Answer >>
  3. How does a forward contract differ from a call option?

    Forward contracts and call options are different financial instruments that allow two parties to purchase or sell assets ... Read Full Answer >>
  4. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
  5. How can an investor profit from a fall in the utilities sector?

    The utilities sector exhibits a high degree of stability compared to the broader market. This makes it best-suited for buy-and-hold ... Read Full Answer >>
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    Options are one category of derivatives. Other types of derivatives include futures contracts, swaps and forward contracts. ... Read Full Answer >>

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