What is a put and call option?
A “put option” is an option contract providing the owner the correct, but not the compulsion, to sell a particular amount of essential security at a particular rate within a particular time. This is the conflicting of a “call option”, which provides the holder the correct to buy shares.
The main difference between a Call & Put option is that, a Call Option provides the buyer the correct but not the compulsion to buy the essential security at the work out rate. A “Put Option” provides the buyer the correct but not the compulsion to sell the essential security at the work out rate.
How does a “put and call option” work: Basically put option purchaser have rights & option sellers have obligation Option purchaser have the correct, but not the compulsion, to pay money for (call) or put up for sale (put) the essential stock (or futures agreement) at a particular rate until the 3rd Friday of their end month.
What is call & put option with example?
The seller has the compulsion to also buy or sell the stock (depending on, what type of option she or he sold; either a put option or a call option) to the purchaser at a particular rate by a particular date…. Remember: The “call option” provides the buyer the correct to buy shares of IBM at the $100 each share.
Why would you sell a put option?
Selling a Call: – You have an compulsion to deliver stock at a prearranged rate to the option purchaser Buying a Put – You have the correct to sell a stock at a predetermined rate.
Selling a Put: – You have an compulsion to purchase the equity at a prearranged rate if the buyer of the “put option” wants to vend it to you.
Why would you buy a put option?
To assessment, buying a put option provides you the correct to sell a specified stock at a assure rate by a sure time. For that freedom, you give a best to the seller (writer) of the place, who assumes, the downside peril and is compelled to pay money for the equity from you at the prearranged rate. Trifid Research is a very good advisory firm for all investors and traders. Trifid research experts provides Free Commodity MCX Tips and Live Gold Market News Headline. And also available for his clients all time.http://www.trifidresearch.com/blog/what-is-a-put-and-call-option What is a put and call option?commodity tipscommodity tips,Free Commodity Tips,Live Commodity Tips,mcx tips