ABSTRACT
This chapter introduces category of basic derivative securities— put and call options. In the field of options and derivatives in general, the definitions are more or less straightforward. Learning why the objects are important, recognizing options in far-flung scenarios, and knowing how to use derivative securities, all require a knowledge deeper than the mere definitions. Exchange traded equity options are "physical delivery" options. This means that there is a physical delivery of the underlying stock to or from brokerage account if the option is exercised. The owner of an equity option can exercise the contract at any time prior to the exercise deadline set by the investor's brokerage firm. Generally the deadline occurs on the option's last day of trading. The expiration date for equity options is the Saturday immediately following the third Friday of the expiration month until February 15, 2015.
