Part 9 Trading Master Class With Experts

What Are Options?

Options are financial contracts that give a trader the right, but not the obligation, to buy or sell an asset at a fixed price (called the strike price) before or on a specific date (called the expiry).
The underlying asset could be a stock, index, commodity, or currency.

Because options provide choice (whether to exercise or not), they are called “options.”

There are two main types:

Call Option – gives you the right to buy at a fixed price.

Put Option – gives you the right to sell at a fixed price.

In both cases, you pay a premium (price of the option). This is the maximum loss for option buyers.