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WDIS: Amped to Trade!

The Two Sides of the Call Contract

WDIS: Amped to Trade!

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

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Anthony and Dr. Jim have a lively discussion today about option contracts - specifically "calls". The contract starts with two sides: the long side (or buyer) and the short side (or seller)...just like a piece of paper. From there, the guys go through the different items that make up the contract: the UL, the expiration, the strike, etc. Dr. Jim is sure to let Anthony know that terminology is one of the hardest things for new students to grasp.

To round out the day, the two touch on the relationship of the UL price in the market to the contract price (or premium) and who benefits from this relationship. Is it the long side or the short side?

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