Part 1 Intraday Master Class

What Are Options?

An option is a financial contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset (such as stocks, indices, or commodities) at a predetermined price (called the strike price) before or on a specific expiry date.

Options are classified into two types:

Call Option: Gives the right to buy an asset at a specific price.

Put Option: Gives the right to sell an asset at a specific price.

For this right, the buyer of an option pays a premium to the seller (writer) of the option.