An option is a contract giving the buyer the right, but not the obligation, to purchase or sell an underlying asset at a predetermined price on or before a particular date.
There are two different types of option contracts – Call options and Put options. A Call option gives the purchaser the right to purchase the underlying asset, even though a Put option gives the purchaser the right to sell the underlying asset.
You can also learn about successful option trading strategies by hunting online.
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For call options, the choice is supposedly in-the-money when the share price is above the strike price. A put option is in-the-money once the share price is below the strike price.
For call options, the choice is supposedly out-the-money when the share price is below the strike price. A put option is out-the-money once the share price is above the strike price.
There are four kinds of participants in options markets: Buyers of forecasts, Sellers of forecasts, and Clients of places and Sellers of places. Option strategy could be:
Extended (purchase): in which you do call in bullish state and long placed in bearish condition.
Short (market): in which you do shot place in the bullish state and brief telephone in nominal condition.
Covered call: where you the underlying asset and short contact choices. This can be used when an investor has a short term neutral opinion on the advantage.