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| | Terms of an Option Contract |
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Terms of an Option Contract
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The terms of an option contract are defined by the conventions of the market in which the option is traded and the specifications of the contract. A securities option is defined by (1) exercise or strike price, (2) expiration date, (3) instrument on which the option is written, (4) dividend or interest adjustment, if any, (5) adjustment for splits and other capital changes, if any, and (6) quantity of the underlying security that makes up the unit of trading. Nonstandard or exotic options may have additional specifications. See Call Option, Option, Option Contract.
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Glossary *
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