An option is a financial derivative that provides the bearer the right, but not the obligation, to buy or sell an asset at a defined price on or before a certain date. The two main types of options are call options (right to buy) and put options (right to sell). Options can be used for hedging purposes or for speculative purposes, to capitalize on the anticipated movement of the stock price.
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Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
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