OPTIONS Trading for Begineers
OPTIONS
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| options trading for Begineers |
Hi........ Investors/ traders in my previous article, I discuss about future market where i shared more information about it. today i am going discuss about another crusial topic of the stock market that is OPTIONS.
This is my favorite topic in stock market so i tried gave you more information about OPTION MARKET, what i can learn in my stock market carrier types of option, call option-put option. OPTION trading, & many related basic information.
Meaning of options?
Options is basically an instrument in the stock market that is traded in the derivative segment. aslo options is a contract between buyer & seller to buy or sell on one of more lot of underlying asset at fixed prise on or before expiry date of contract
OR
An options is a contract that allows to investors/traders to purchase or trade instrument like securities at index fund at a per decieded rate after aspecified peroid selling and purchasing of options are carried out in the option market
In simple way option is contract that allows investors or traders to buy or sell or underlying instrument like security. which is contract based.
Meaning of options?
Options is basically an instrument in the stock market that is traded in the derivative segment. aslo options is a contract between buyer & seller to buy or sell on one of more lot of underlying asset at fixed prise on or before expiry date of contract
OR
An options is a contract that allows to investors/traders to purchase or trade instrument like securities at index fund at a per decieded rate after aspecified peroid selling and purchasing of options are carried out in the option market
In simple way option is contract that allows investors or traders to buy or sell or underlying instrument like security. which is contract based.
TYPES OF OPTION CONTRACT
Two types of option contract that is buy or sell in stock market.
1)CALL OPTION
Call option is a main part of option. an call option will give a trader or investors to buy underlying asset at the strike prise within the fixed time period the option trader who is creating call option will have the obgligation to sell the asset if you are willing to buy a contract
For buying the call option first you pay the premium prise of the contract to the option writer.
2) PUT OPTION
A Put option is a aposite of call option when trader buying a put option it will give the right to sell off asset in the strike prise on or before expiry of the option contract. will trader have the freedom to either honour the put option or ignore it. seller of the put option will be legally bound to buy the put if you are willing to sell.
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| SET -UP FOR OPTION TRADING |
OPTION TRADING
OPTION TRADING allows you to buy or sell stocks ETF or security at specific prise range for specific date that is contract date.this type of trading also gives buyers the flexiblity to not buy the security at specific prise of that date.
The 2 terms that help investors in option trading
1) leverage- options help you profit from changis in share prise without putting them down the full prise of share you get control over the shares without buying them outright.
2) Hedging- they can also be used to protect traders form fluctuations in the prise of share trader control over the share at a pre detrmined prise for a specified period of time
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