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Sorry if this is a stupid question - I've only seen options as a compensation mechanism. Can you buy options on the open market just like shares? If not, how

Sorry if this is a stupid question - I've only seen options as a compensation mechanism. Can you buy options on the open market just like shares? If not, how do politicians end up with options?

lotsofpulp 5y ago
Yes, you can purchase (and sell) options via many brokerage websites. Robinhood became quite popular because it made it very easy via an app for the masses.
deleted 5y ago
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computerex 5y ago
Of course, they are a huge market. You can do it with most brokers including robinhood. Not only can you buy options, you can also write the contract and sell it on the market.
akiselev 5y ago
An "option" is a generic name for a contract that gives you the option of doing something in the future. The stock options employees get as part of their compensation and the options stock traders deal in (a financial instrument) are very specific forms of those kinds of contracts.
odiroot 5y ago
This is what "kids" on Robinhood were doing the last year or so.
vmception 5y ago
The "options as a compensation mechanism" are primarily due to the tax efficiency of options as a whole. The options contract market is massive, in the public markets they are fungible and actively tradeable. In private equity markets they are mostly limited to compensation mechanisms.
swalsh 5y ago
Options are probably the most common mechanism for a person to leverage themselves. An out-of-the-money option will yield far more than simply buying a single share. That said, it's a lot more risky.
rtkwe 5y ago
There's loads of different options. A quick introduction: https://www.investopedia.com/options-basics-tutorial-4583012 https://www.investopedia.com/options-basics-tutorial-4583012
soheil 5y ago
Yes you can buy options, however, you need a different type of brokerage account to trade options. I believe there is a high minimum amount, a few hundred thousands, to open an account that is able to trade options.
- txsoftwaredev 5y ago
  You can trade options with just a couple of bucks or on margin. You don't need a bunch of cash. I've done it on Robinhood and bought some calls for a few hundred bucks.

Sorry if this is a stupid question - I've only seen options as a compensation mechanism. Can you buy options on the open market just like shares? If not, how do politicians end up with options?

lotsofpulp 5y ago

Yes, you can purchase (and sell) options via many brokerage websites. Robinhood became quite popular because it made it very easy via an app for the masses.

deleted 5y ago

[deleted]

computerex 5y ago

Of course, they are a huge market. You can do it with most brokers including robinhood. Not only can you buy options, you can also write the contract and sell it on the market.

akiselev 5y ago

An "option" is a generic name for a contract that gives you the option of doing something in the future. The stock options employees get as part of their compensation and the options stock traders deal in (a financial instrument) are very specific forms of those kinds of contracts.

odiroot 5y ago

This is what "kids" on Robinhood were doing the last year or so.

vmception 5y ago

The "options as a compensation mechanism" are primarily due to the tax efficiency of options as a whole. The options contract market is massive, in the public markets they are fungible and actively tradeable. In private equity markets they are mostly limited to compensation mechanisms.

swalsh 5y ago

Options are probably the most common mechanism for a person to leverage themselves. An out-of-the-money option will yield far more than simply buying a single share. That said, it's a lot more risky.

rtkwe 5y ago

There's loads of different options. A quick introduction: https://www.investopedia.com/options-basics-tutorial-4583012 https://www.investopedia.com/options-basics-tutorial-4583012

soheil 5y ago

Yes you can buy options, however, you need a different type of brokerage account to trade options. I believe there is a high minimum amount, a few hundred thousands, to open an account that is able to trade options.

txsoftwaredev 5y ago
You can trade options with just a couple of bucks or on margin. You don't need a bunch of cash. I've done it on Robinhood and bought some calls for a few hundred bucks.