All standardized option contracts are issued and their performance is guaranteed by the Options Clearing Corporation (The OCC). Standardized options trade on the exchanges such as the Chicago Board Options Exchange CBOE, NYSE ARCA, NYSE AMEX and the NASDQ OMX / PHLX.

All option contracts are for one round lot of the underlying stock or 100 shares. To determine the amount that an investor either paid or received for the contract, take the premium and multiply it by 100. If an investor paid $4 for 1 KLM August 70 call, they paid $400 for the right to buy 100 shares of KLM at $70 per share until August. If another investor paid $2 for 1 JTJ May 50 put, they paid $200 for the right to sell 100 shares of JTJ at $50 until May.

NeedĀ Help Passing Your Series 4 Exam?

Managing An Option Position

Related Articles
  1. Trading

    Trading Options on Futures Contracts

    Futures contracts are available for all sorts of financial products, from equity indexes to precious metals. Trading options based on futures means buying call or put options based on the direction ...
  2. Trading

    Options Hazards That Can Bruise Your Portfolio

    Learn the top three risks and how they can affect you on either side of an options trade.
  3. Trading

    Option trading strategies: A guide for beginners

    Options offer alternative strategies for investors to profit from trading underlying securities. Learn about the four basic option strategies for beginners.
  4. Trading

    A Newbie's Guide to Reading an Options Chain

    Learning to understand the language of options chains will help you become a more effective options trader.
  5. Trading

    The Basics Of Option Price

    Learn how options are priced, what causes changes in the price, and pitfalls to avoid when trading options.
  6. Trading

    Beginners Guide To Options Strategies

    Find out four simple ways to profit from call and put options strategies.
  7. Trading

    Google Stock Too Expensive for You? Try Options

    Learn how to invest in Google (now Alphabet, Inc.) and other high-value stocks with less capital by using options.
  8. Trading

    Options Pricing

    Options are valued in a variety of different ways. Learn about how options are priced with this tutorial.
Trading Center