Options for Beginners Easy Steps to Profits
Understanding the Basics of Options
Options trading can seem daunting at first, but the core concept is relatively simple. An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset (like a stock) at a specific price (the strike price) on or before a certain date (the expiration date). There are two main types: calls (the right to buy) and puts (the right to sell). Think of it like insurance; you pay a premium for the right to protect yourself against price movements, or to profit from them.