2. OPTIONS
What is an option?
• An option is a contract giving the buyer the
right, but not the obligation, to buy or sell an
underlying asset (a stock, bond, index, etc.) at
a specific price on or before a certain date
• An option is a security, just like a stock or a
bond, and constitutes a binding contract with
strictly defined terms and properties.
3. OPTION VS STOCK
• Options vs. StocksSimilarities
• Listed Options are securities, just like stocks.
• Options trade like stocks, with buyers making
bids and sellers making offers.
• Options are actively traded in a listed market,
just like stocks. They can be bought and sold
just like any other security.
• Differences
• Options are derivatives, unlike stocks (i.e,
options derive their value from something else,
the underlying security).
• Options have expiration dates, while stocks do
not.
• There is not a fixed number of options, as there
are with stock shares available.
• Stockowners have a share of the company, with
voting and dividend rights. Options convey no
such rights.
4. TYPES OF OPTIONS
• CALL OPTION
• Call Option is an option to buy a stock at a
specific price on or before a certain date. In
this way, Call options are like security
deposits.
• If, for example, you wanted to rent a certain
property, and left a security deposit for it, the
money would be used to insure that you could, in
fact, rent that property at the price agreed upon
when you returned.
• When you buy a Call option, the price you pay for
it, called the option premium, secures your right
to buy that certain stock at a specified price,
called the strike price.
5. TYPES OF OPTIONS
• PUT OPTION
• Put Options are options to sell a stock at a
specific price on or before a certain date.
• Put options are like insurance policies If you
buy a new car, and then buy auto insurance on the
car, you pay a premium and are, hence, protected
if the asset is damaged in an accident. If this
happens, you can use your policy to regain the
insured value of the car. In this way, the put
option gains in value as the value of the
underlying instrument decreases.
• If all goes well and the insurance is not needed,
the insurance company keeps your premium in
return for taking on the risk.
•
7. WHAT WE DO?
• WE ARE A TRAINING INSTITUTE FOR OPTION
TRADING.
• WE GIVE ONE ON ONE TRAINING DURING LIVE
TRADING SESSION.
• WE GIVE TRAINING FOR DIFFERENT TRADING
PLATFORMS IN STOCK MARKET.
