Resources
Glossary of Terms
Equity options
Equity options are agreements between two parties for a specified time period (up to the expiry date) that give holders the right, not the obligation, to buy or sell a specified number of shares, usually a lot of 100, at a pre-determined price (exercise or strike price). Investors can buy or sell options just like shares.
Call option
A call option contract gives the holder the right to buy and obliges the writer to sell a specified number of shares at a specified strike price, any time before its expiry date.
Put option
A put option contract gives the holder the right to sell and obliges the writer to buy a specified number of shares at a specified strike price, any time before its expiry date.
Strike price
The strike price is the price at which the option holder can buy (call option) or sell (put option) the underlying stock.
Option premium
The option premium is the price the buyer pays the seller for the rights conveyed by the option contract. It is the price of the option.
Expiry date
The expiry date is the date on which the option and the right to exercise it cease to exist. Options expire at noon on the Saturday following the third Friday of the expiry month (last trading day).
Source: TMX Montreal Exchange
For More Information
Options FAQ – TMX Montreal Exchange
Options Guides and Strategies – TMX Montreal Exchange