A financial derivative where the buyer has the right to buy/sell an asset by the expiration date. More specifically, Call Options are contracts that give the owner the right (not the obligation) to buy an asset in the future (before or at the expiration date) at an agreed price. Investors buy Call Options when they believe that the value of the underlying asset will increase above the strike price. Similarly, Put Options are contracts that give the owner the right (not the obligation) to sell an asset in the future (before or at the expiration date) at an agreed price. Investors buy Put Options when they believe that the value of the underlying asset will decrease below the strike price.
Here are some examples of different types of Options:
- Call
- Put
- American Style
- European Style
- Exchange Treaded Options
- Over the Counter Options
- Option Type by Expiration
- Option Type by Underlying Security
- Employee Stock Option
- Cash Settled Options
- Exotic Options
