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Financial Dictionary

 

Atlantic Financial
Investment Word

Option

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An Option represents the right to buy or sell a security at a certain price. Options offer a good deal of leverage because they enable buyers to have the profit potential of purchasing several hundred shares for far less money than it would cost to purchase the actual shares.

Options also offer a great deal of risk, as options only last for a designated amount of time and then expire. If they expire, then the investment in the options becomes valueless.

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