Options

Key Points

  • Options are complex and sophisticated investments
  • Investors may choose to use two types of option contracts: calls and puts
  • Each option contract type has a distinct function

Options are complex and sophisticated investments that give the holder the right or the obligation to buy or sell securities at a predetermined price within a set period of time.

There are two types of option contracts:

Calls

  • Give the buyer the right to buy a specified amount of securities at a predetermined price.
  • Give the seller the obligation to sell a specified amount of securities at a predetermined price.

Puts

  • Give the buyer the right to sell a specified amount of securities at a predetermined price.
  • Give the seller the obligation to buy a specified amount of securities at a predetermined price.

Because of the complex nature of trading options, investors are required to read the Characteristics and Risks of Standardized Options disclosure document before deciding if an option strategy is right for them.

Take the next step

To find out more about trading options at Ameriprise Financial, contact your Ameriprise financial advisor or locate an advisor near you.

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Statement of financial condition

Ameriprise Financial's statement of financial condition is provided here in accordance with Rule 17a-5 of the Securities Exchange Act of 1934 and is updated semiannually.

Options are complex, high risk investments that are not suitable for all investors and are appropriate only for those who understand and can assume the associated risks Prior to engaging in any options strategy, clients must review the document Characteristics and Risks of Standardized Options (the “ODD”), which explains the features and risks of exchange traded options. Copies are available from the Options Clearing Corporation at (888) OPTIONS (888 678 4667) or on ameriprise.com by searching “options.” Clients should consult their tax advisor before entering into any options transaction and, as appropriate, seek guidance from their legal and tax professionals regarding their individual circumstances.
Investing involves risk, including the risk of loss of principal. Selling options contracts involves significant risk, including the potential for losses far greater than the proceeds received from the sale of the options contract.
Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.