Call and Put Options

Call Option A call option is the right, but not an obligation to buy something at a fixed price – the strike price at anytime within the specified time period. In this definition, the “something” is the underlying which the investor has the right to...

Strike price

The strike price, also known as the exercise price, is the price at which the underlying stock would be bought or sold by the purchaser of the option. The strike price is fixed during the life time of the option contract and does not undergo any change, even though...

Status of an Option

The status of an option changes on a daily basis depending upon the market rate of the underlying. To find out the status of the option, the market rate of the underlying is compared with the strike price of the option contract. Accordingly, an Option will fall into...

Selling short in the derivatives market

Futures and options traders use the terms long and short similar to the regular equity markets. A long position means that the investor has bought the derivative instrument – futures or options. A short position means that the investor has sold the instrument....

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