Option contracts have specific characteristics that are important to fully understand before you start using them.u00a0
Options always have a specified contract size which has a direct impact on the ‘amount’ of risk you are taking. In general, an option contract has an underlying value of 100 shares or 100 x the index. So if we talk about 1 option on stock XYZ u00a0with a strike price of 20,00 you have an underlying exposure of 100 shares x 20 = 2.000.u00a0
In the case of an index option for example the S&P 500 and an option 4.000, your risk is 100 x 4000 = 400.000.