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Buying and Selling Options
How long and short options work
In a Nutshell
In general terms, when we trade an option we are establishing a contract with another party. As the long side we pay money to reserve a desired share price. As the short side we are charging a premium to assume the risk of honoring that share price regardless of the market value. Options do not represent ownership or investment in the underlying product, nothing is loaned, and no interest payments are imposed.
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