Futures Options vs Stock Options: Tax & Trading Guide
Warren Team
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Key terms
- StockA share of ownership in a company. When you buy stock, you become a partial owner with potential to earn money through price appreciation and dividends.
- OptionsContracts giving the right, but not obligation, to buy (call) or sell (put) an asset at a set price before expiration. Used for speculation, hedging, or income generation.
- Tax BracketThe range of income subject to a certain income tax rate in the progressive US tax system. Higher income levels are taxed at higher rates (marginal tax rates).
- Blue-Chip StockStock in a large, well-established, and financially sound company with a history of reliable performance. Examples include Apple, Microsoft, and Johnson & Johnson.
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