Ask The Institute

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This week's question:

DATE: November 21, 2014

QUESTION:

What is the contract size of an equity option?

ANSWER:
The contract size of an equity option is the number of shares that the option buyer has the right to buy or sell. The standard contract size for equity options is 100 shares. For example, one call option contract gives the holder the right to buy 100 shares at the option's strike price. Alternately, one put option contract gives the holder the right to sell 100 shares at the option's strike price. To learn more about the contract size of an equity option, view this segment of "Ask the Institute."