What are Options?

Q: What are Options?

There are four basic options trades: Long call – you have the right but not obligation to buy an asset at an agreed price on a future date. Short call – if the long call holder exercises the option to buy, you have an obligation to sell the asset at an agreed price. Long put – you have the right but not obligation to sell an asset at an agreed price on a future date. Short put – if the long put holder exercises the option to sell, you have an obligation to buy the asset at an agreed price.

Question

What are Options?

James Rabinovich · Accepted Answer

There are four basic options trades:

Long call – you have the right but not obligation to buy an asset at an agreed price on a future date.

Short call – if the long call holder exercises the option to buy, you have an obligation to sell the asset at an agreed price.

Long put – you have the right but not obligation to sell an asset at an agreed price on a future date.

Short put – if the long put holder exercises the option to sell, you have an obligation to buy the asset at an agreed price.

What are Options?

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