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What's an option?
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What's an option?

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Options are bets investors place on a stock, allowing them to buy (a "call" option) or sell (a "put" option) at a particular price. That allows people to wager on whether a stock will rise or fall.

Investors can place relatively inexpensive options bets and sell those options as they rise in value when the stock price gets closer to their wager. Although buying and selling options isn't the same as buying and selling stocks, big options volumes can drive a stock up or down, typically because options traders buy or sell the stock itself as a hedge.

In the case of GameStop and other stocks targeted by WSB, traders keep buying options, forcing the investors selling those options to hedge their bets by buying up GameStop stock.

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