Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price and date.
Give the holder the right to buy an asset at a specific price within a specific time period.
Give the holder the right to sell an asset at a specific price within a specific time period.
The predetermined price at which an option can be exercised.
The date on which an option contract becomes void.
The price paid by the buyer to the seller to acquire the option rights.
A call option is ITM when the underlying price is above the strike price. A put option is ITM when the underlying price is below the strike price.
Writing call options against a long position in the underlying asset.
Buying put options to protect against a decline in the value of a long position.
Buying both a call and a put option with the same strike price and expiration date.
Selling an out-of-the-money call spread and an out-of-the-money put spread.