Know the components
An option’s value can be influenced by the underlying price, strike, time to expiry, volatility, rates and dividends.
Asymmetric risk
A buyer may lose the premium paid. Certain option-selling strategies can involve substantially greater or potentially unlimited risk.
Suitability and permissions
Access should require the relevant eligibility, knowledge assessment, product permissions and legal approval.
Common questions
What is the option premium?: It is the price paid by the buyer and received by the seller, before fees.
Does an option always expire with value?: No. An option may expire worthless.