Option Trading

Option Trading
An ‘Option’ is a type of security that can be bought or sold at a specified price within a specified period of time, in exchange for a non-refundable upfront deposit.An option, just like a stock or bond, is a security. It is also a binding contract with strictly defined terms and properties.
An options offers the buyer the right to buy, not the obligation to buy at the specified price or date.

Options are a type of derivative product.
The right to sell a security is called a ‘Put Option’, while the right to buy is called the ‘Call Option’.
Learn option trading and you can profit from any market condition. Understand how to trade the options market using the wide range of option strategies. Options involve risks and are not suitable for everyone. Option trading can be hypothetical in nature and carry substantial risk of loss. Only invest with risk capital.

Trading in options is more difficult than trading in regular shares.
It calls for a good understanding of trading and investment practices as well as constant watching of market rise and fall to protect against losses.
Just as futures contracts reduce risks for buyers by setting a predetermined future price for an underlying asset, options contracts do the same however, without the obligation to buy that exists in a futures.

The seller of an options contract is called the ‘options writer. Unlike the buyer in an options contract, the seller has no rights and must sell the assets at the agreed price if the buyer chooses to execute the options contract on or before the agreed date, in exchange for an upfront payment from the buyer.
There is no physical exchange of documents at the time of entering into an options contract. The transactions are merely recorded in the stock exchange through which they are routed.

The Author

Pramod Baviskar

Professional Market Trader And Owner Of Dalal Street Winners Advisory And Coaching Services. Working Since 2007 And Online Presence Since 2010. We Provide Highly Accurate And Professional 1 Entry And 1 Exit Future, Option, Commodity, Currency And Intraday Stock Tips On Whatsapp With Live Support And Follow Up.
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