An options order contains more information than a stock order. Follow this example to learn what's similar to and what's different from a stock trade order.
Buy to open 1 January 21, 2014, XYZ 70 call at 3.25
|Buy||Like a stock trade, this is the action.|
|To open||Not like a stock trade, this indicates a new position
("to close" indicates that an existing position is being eliminated).
|1||Similar to a stock trade, but different. This indicates the number of contracts being traded (not the number of shares).|
|January 21, 2014||Not like a stock trade, this is the expiration date; the date at which the option and its rights no longer exist.|
|XYZ||Similar to a stock trade, but different. This is the "underlying," which is usually 100 shares of XYZ stock.|
|70||Not like a stock trade, this is the strike price; the price at which the stock is traded if an option is exercised.|
|Call||Not like a stock trade, this is the type of option. There are also put options.|
|At 3.25||Like a stock, this is the price per share of the option. Since the underlying is 100 shares, the total dollar cost is $325 plus commissions.|
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