Part 7 Trading Master Class With Experts

What Are Options?

Options are derivative instruments whose value is derived from an underlying asset such as Nifty, Bank Nifty, stocks, commodities, or currencies.
An option is a contract between a buyer and seller regarding the future price of an asset within a specific time.

There are two types of options:

Call Option (CE) – Gives the buyer the RIGHT (but not the obligation) to BUY the asset at a fixed price (strike price).

Put Option (PE) – Gives the buyer the RIGHT (but not the obligation) to SELL the asset at a fixed price.

The seller (also called option writer) has the OBLIGATION to fulfill the contract if the buyer exercises the option.