Part 8 Trading Master Class

What Are Options?

Options are financial contracts that give the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price within a specified time. Unlike stocks, where ownership is direct, options merely provide conditional access to ownership. This feature allows traders to profit from price movements without tying up large capital.

The predetermined price is known as the strike price, and the final expiry date is known as the expiration date.

The underlying assets can include:

Stocks

Exchange-traded funds (ETFs)

Stock indices like NIFTY or S&P 500

Commodities like gold, oil

Currencies