What are options?

Answer 1

According to Optiontradingpedia.com,

"A stock option is a contract that gives the buyer the "right" or "power", but not the "obligation", to exercise the contract on or before a fixed future date (the exercise date or expiration) to trade the underlying stock at an agreed price."

Essentially, it is a trading instrument that gives you leverage if used purely for speculation and protection if used as a hedge. The various options strategies that can be made using options also gives traders a precise mean of trading almost every outlook on a stock.

Answer 2

Options market is a market where options are being traded. Options are derivative trading instruments that gives the holder the right but not the obligation to buy or sell a certain stock or underlying asset at a fixed price. They come in two forms; Call Options and Put Options.

Call options allow the owner of the option to buy the underlying stock at a fixed price no matter what price the stock is. One buys call options for bullish speculations.

Put options allow the owner of the option to sell the underlying stock at a fixed price no matter what price the stock is. One buys put options for bearish speculations.

Answer 3

In regard to finance, a stock option IS a contract the allows the owner/holder the right, but not the obligation, to buy or sell an underlying asset at a specific price, on or before a specific date, depending on the option type.

Options are a rather complex form of trading stocks, however they can be very lucrative when executed with technical analysis and research. Trading options allows you to work with leverage to your advantage, which allows you to use smaller amounts of money in order to control larger orders.

Like all financial endevours there is potential for risk and i would not recommend dabbling with options without proper training and direction. There's a bunch of free content on the internet which is super helpful. Eventually i did purchase a course and if you do just make sure you do your research. I left a link in my bio for the course I took if you want to check them out.

Answer 4

There's no guarantee what they will do to the market. You have to watch closely and be careful not to make a move too fast.