Options Trading and the Black-Scholes Model
Basics An option is a financial contract that gives you the right (but not obligation) to buy or sell usually 100 shares of the underlying asset at a strike price $X$ at or before some specific date, usually Fridays. The price of an option is quoted on a per share basis, for example 5.5 USD. To buy the option, you have to pay 5.5 x 100 = 550 USD. If the option later rises to 6....