Options are a type of derivative security. They are a derivative because the price of an option is intrinsically linked to the price of something else. Specifically, options are contracts that grant the right, but not the obligation to buy or sell an underlying asset at a set price on or before a certain date. We saw in the last section that once optiobs company completes an initial public offering (IPO), its shares become public and can be traded on a stock market.
Tradnig markets are venues where buyers and sellers of shares meet and decide on a price to trade. A round lot has turned into a standard trading unit around the public exchanges for quite way back when. Usually, to get a broker agent, they set their commission for the transaction for minimum 100 units of share at the certain price. Whenever we buy lower than 100 units of share, they still impose us this commission.
For an example, whenever we buy 100 units share and pay the agent USD 30 for the exchange transactions, in addition they charge us that amount: USD 30 also, when we only buy and sell 1 unit.