Options are contracts where a buyer buys the right to buy or sell a particular asset within a particular time and at a particular price. It is an option and not a legal obligation.
Investors💪 use this as it is a good way to make money if prices rise or fall for a specific asset.
Options have three key features:
Strike Price—price at which the option is to be bought or sold (also known as “Exercise Price”)✔
Premium—the price the option buyer pays to the option seller to acquire the option✔
Expiration Date—the date by which the option must be bought or sold or it will become worthless✔
Types of options💰
Call Options: the right to buy an asset at a predetermined fixed price.
Put Options: the right to sell an asset at a predetermined fixed price.