option history

An option is a contract, which is between the seller and the buyer of the option. This agreement grants the right, but not a duty, the buyer to sell or buy the underlying asset at a specified price and within a specified period of time. Person, selling option, is obliged to buy or sell the selected asset at a price, specified in the option. Actually, option is a very complex instrument. Person, whoever buys it must hit three targets at once: make the right choice of the underlying asset, predict which direction the price will go and how fast this movement will be. As for the underlying asset, then it can be a regular share, index, futures. Option type can be buy and sell (call and put respectively). Buying a call option, the trader is counting on the growth of the underlying asset. Buying a put option, the trader expects the price to fall.