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Call options: The buyers have the right to buy with no obligation.
Put options: The sellers have the right to sell with no obligation.
Buyers and sellers set the premium price.
Call options: The buyers have the right to buy with no obligation.
Put options: The sellers have the right to sell with no obligation.
Buyers and sellers set the premium price.
In a CALL option the buyer of the contract has the right to BUY from the seller at the strike price that is fixed & the contract can be executed on a fixed date. The buyer has no obligation with respect to this contract.
In a PUT option the buyer of the contract has the right to SELL at the strike price that is fixed <span style=”line-height: 1.5;”>& the contract can be executed on a fixed date. The buyer has no obligation with respect to this contract.</span>
The premium is decided by the buyer and seller.
call option is buyer has rights to buy with no obligations. he gets profit if the market price goes above the strike price.
put option is buyer has rights to sell with no obligations. he gets profit if the market price goes below the strike price.
premium is the amount at which the seller agrees to sign the contract as he is not going to get any profit from the trade other than the premium.
Call Options :- The buyer gets the “Rights to Buy” without any obligations. The buyer makes the profit only if the share price moves above the strike price.
Put Options :- The buyer gets the “Rights to Sell” without any obligations. The buyer makes the profit only if the share price moves below the strike price.
Premium :- Both buyer & sell on this price, which is paid to the seller as the seller doesn’t have any rights and he wouldn’t be able to make much profits. So the premium is fixed which is profit for the seller if the market goes other way around from agreed strike price.
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