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An option contract is a type of contract that protects an offeree from an offeror's ability to revoke their offer to engage in a contract. Under the common law, consideration for the option contract is required as it is still a form of contract, cf. Restatement (Second) of Contracts § 87(1).
Margin loan interest and options fees account for 39.5% of Robinhood's total revenue through nine months of 2024. These types of speculative activities dry up during market downturns.
Short Trading Options. Call options are contracts to buy a stock, while put options are contracts to sell. A trader can begin the options trade by either buying — “going long” — or selling ...
On the other hand, the company struggled through the ensuing stock market sell-off, as client transactions declined sharply. The stock fell to a low of $6.89 in 2022 as financial losses mounted.
In finance, a forward contract, or simply a forward, is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed on in the contract, making it a type of derivative instrument.
The option style, as specified in the contract, determines when, how, and under what circumstances, the option holder may exercise it. It is at the discretion of the owner whether (and in some circumstances when) to exercise it. European – European-style option contracts may only be exercised at the option's expiration date. Thus they can ...
Through the first three quarters of 2024, Robinhood's transaction-based revenue, driven primarily by options trading, reached $975 million, equating to a year-over-year growth of 35%.
When options have large open interest, they have a large number of buyers and sellers. An active secondary market will increase the odds of getting option orders filled at good prices. All other things being equal, the larger the open interest, the easier it will be to trade that option at a reasonable spread between the bid and ask.