American vs European Style Options
American Options Exercise Anytime: The ability to exercise an American option at any moment prior to its expiration is its primary characteristic. Due to this flexibility, the holder can respond to changes in the market and exercise the right to purchase (in the case of call options) or sell (in the case of put options) […]
How to Trade Options For Beginners
These days, a lot of brokers let qualifying clients trade options. You must have approval from your broker for both margin and options if you wish to trade them. There are four basic ways to trade options. Buy (Long) Calls: You think the price of the underlying asset will rise. Purchasing a call allows you […]
Options Trading Terminology
Strike Price The strike price is an important concept in options trading since it establishes the predetermined price at which an option contract can be executed. Essentially, it is the price at which the option holder can purchase (in the case of a call option) or sell (in the case of a put option) the […]
Fundamentals of Options: A Comprehensive Guide
Understanding Options: Calls and Puts Financial derivatives known as options grant the buyer the right, but not the responsibility, to purchase or sell the underlying asset at a predetermined price, referred to as the striking price, on or before a designated date. Options are used to leverage investment positions, speculate, and act as hedging. Hedging: […]
