OPTIONS TRADING STRATEGIES
ENGLISHChapter-1 Options Basics
What are Options?
Options are financial derivatives that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price (strike price) on or before a specified date (expiration date).
Call Options vs Put Options
Call Options: Give the holder the right to buy the underlying asset.
Put Options: Give the holder the right to sell the underlying asset.
Options Terminology
Strike Price: The price at which the option holder can buy or sell the underlying asset.
Premium: The price paid by the buyer to the seller for the option contract.
Expiration Date: The date after which the option becomes void.
In-the-money (ITM): When an option has intrinsic value.
Out-of-the-money (OTM): When an option has no intrinsic value.
At-the-money (ATM): When the strike price is equal to the current market price of the underlying asset.