Basics Of Option Trading

Basics of option trading

Basics of option trading. Firstly we need to know about where this option trading come from. It is the part of derivative family. A derivative is a contract between two or more parties whose value is based on underlying financial asset or set of asset. There are many derivatives :- Option. Future contracts. Forward contracts. Swaps. Warrants. But today we are talking about basics of option trading. Options are trading instrument in which a contract is made between two parties. Stock option buyer purchases the right to sell or buy shares of  an underlying stock at a predetermined price from or to the option seller within a fixed period of time. Basics Of Option Trading Options can be traded on several kind of underlying securities. The most common one are :- Stocks. Indexes. Exchange traded funds. So feel to substitute your preference style of trading. If you want to have quick results with limited investments and higher returns, you must go for option trading. Shares are not of your interest, as it requires patience to get a good amount of return. Than you must invest in option instrument.   The buyer of the option gives the premium to seller in Read More …