PCR Trading Strategies

What is an Option?

An option is a financial contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset (such as a stock or index) at a specific price (called the strike price) before or on a certain date (called the expiry date).

There are two main types of options:

Call Option: Gives the holder the right to buy the asset.

Put Option: Gives the holder the right to sell the asset.

The person who sells (writes) the option has the obligation to fulfill the contract if the buyer chooses to exercise it.