What are options?
Good Question… Options are an agreement between two parties to buy or sell an asset at a fixed priced for a future date, known as an option contract.
The reason that options are called options is because the buyer has the ‘option’ to perform the transaction. Let’s say the assets value decreases over the life of the contract, the buyer can simply decide not to continue with the process. This allows options traders and investors the flexibility and leverage to gamble with specific market outcomes.
Calls and Puts are the two types of option contracts. A Call Option gives the buyer the right to buy a certain asset for a specific price on a specific date. A Put Option gives the buyer the right to sell an asset for a specific price on a specific date.
The beauty of options is their versatility. Options allow you to adjust to the market accordingly while being as conservative or daring as you want.
Now that I have answered your question, why don’t you answer mine… Are options right for you?