Option contract multipliers are used for standardization in the market. Equity call and put options have a multiplier of 100. So, each option contract controls 100 shares of a stock or ETF.
Options contracts are priced on a per-share basis.
For example, an AAPL call (or put) option with a $2.50 premium has an actual value of $250 per contract.
Options contracts are leveraged financial instruments. The number of shares an options contract represents is called the contract multiplier. For example, one stock option contract is equivalent to 100 shares of the underlying asset. If the quoted option premium is $2 and the option contract multiplier is 100, the option contract’s cost is $200. Different instruments have different contract multipliers to determine the value of the options contract.
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