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.