Options mechanics
What is the precise definition of an options contract and what underlying asset quantity does it control?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
An options contract is a standardized agreement giving the holder the right, not obligation, to buy or sell 100 shares of an underlying stock at a fixed strike price on or before expiration.
How it works
Each equity option contract controls exactly 100 shares of the underlying stock unless adjusted for a split, merger, or special dividend, which the OCC handles through contract adjustments published on its memo site.
An example
One XYZ 50 call controls 100 shares, so buying three contracts gives exposure to 300 shares of XYZ at the 50 strike until the stated expiration date.
Risk & limitations
Contract terms including multiplier can change after corporate actions, so always verify current deliverable size on OCC's adjusted options memos before trading.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.