Standardized options vs employee stock options

Q: What are the differences between standardized options and employee stock options?

A: There are quite a few differences between these two types of stock options. Firstly, the terms of employee stock options are not fixed while exchange traded options have standardized terms, with each contract usually representing 100 shares of the underlying stock. Secondly, employee stock options are not traded on exchanges whereas standardized options are traded on many exchanges in the United States. Finally, employee stock options generally are not transferable while standardized options are interchangeable and can be freely traded within the trading hours on any exchange that lists them.

More Frequently Asked Questions

  1. I recently bought a call option. Since then, the stock price has risen and so has the call option. I wish to sell my call option for a profit but am I obligated to deliver the underlying stock if the option buyer decides to exercise his call option?
  2. Does an increase in open interest imply a bullish sentiment?
  3. I own options on a stock that has just declared a 2 for 1 stock split. What happens to my options?
  4. What's the difference between options and futures?
  5. Why do some stocks have options for trading while others don't?
  6. Can i be assigned if I buy-to-close a short position?

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