Standardized option contracts provide orderly, efficient, and liquid option markets. Except under special circumstances, all stock option contracts are for 100 shares of the underlying stock. The strike price of an option is the specified share price at which the shares of stock will be bought or sold if the buyer of an option, or the holder, exercises his option. Strike prices are listed in increments of , 5, or 10 points, depending on the market price of the underlying security, and only strike prices a few levels above and below the current market price are traded. Other than for long-term options, or LEAPS, which are discussed.
