Overview

Options are a type of financial security that is traded at the financial markets. This means you can buy and sell options and make a profit in the process. However, they are not direct security but a derivative. This implies that options are a derivative or security whose value is derived from that of the underlying security. An option contract is defined as a contract agreed between two individuals. These are the seller and the buyer. The option contract awards the buyer a right to sell the underlying asset at a specific price and a particular date. However, there is no obligation on the buyer's part. On the other hand, the seller is obligated to sell the underlying stock should the buyer choose to exercise the option.

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9781801682312

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