Part 1 Intraday Trading Masterclass

What Are Options?

An option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell an underlying asset (like a stock, index, or commodity) at a predetermined price on or before a specific date.

There are two main types of options:

Call Option: Gives the holder the right to buy the underlying asset.

Put Option: Gives the holder the right to sell the underlying asset.

The buyer of an option pays a premium to the seller (also called the writer) for this right. The premium depends on various factors like time to expiry, volatility, and the price of the underlying asset.