Do you need 100 shares to trade options?

Options trading and volatility are intrinsically linked to each other in this way. Not exercising your option means you don't buy or sell stocks and ultimately your option will expire. If the stock trades below the strike price, the option runs “out of money” and the option expires worthless. If the stock is trading above the strike price, the option is considered to be in the money and will be exercised.

A call option allows you to buy shares at a certain price for a set period, and a put option allows you to sell your shares at a certain price for a certain period of time. If you believe that the market price of the underlying stock will remain stable, trade lower, or lower, you can consider selling or “writing a call option.” Option stocks normalized in 1973, when one option became equal to one hundred shares. This was not very good for the market, as option buyers had to be paired with option sellers, and the more versatility in the number of shares, the more difficult it was to match buyers and sellers. But before your first trade, you'll need to ask your broker for a level of options trading based on their knowledge and experience.