An options contract is a
conditional derivative contract that allows a buyer to either sell or buy a
security at a specified time in the future. The seller charges option buyers a
certain premium for the right to purchase an option contract. If the market
prices are unfavorable, the contract expires worthless. There are two types of
option contracts: call options and put options. The former option gives the
buyer of a call option the right to buy or call the underlying security at a
specified future time at a predetermined price. Alternatively, a put option
gives the buyer the right to sell an asset at a specified future date at a
predetermined price.
What is
option strategy?
There are many types of options strategies to maximize
profit when using futures and options contracts for own trades. In general,
these can be divided into the purchase of call options or put options with a
certain frequency. The options strategies are described below as follows:
1. Long
Call