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An option contract is a contract between a buyer and a seller. The option is connected to something, such as a listed stock, an exchange index, futures contracts, or real estate. Options have one feature that sets them apart from all other existing financial instruments: the holder of an option has the right, but not the obligation, to buy or sell an underlying asset at a predetermined price during a specified period. Thus, the option holder will exercise his or her option (i.e. take up the rights granted by the option) only if it is profitable to do so. The maximum possible loss to the holder of an option is limited, but the potential profit is unlimited.