Options markets is the medium exchange for optioned contract which tend to allow the person in possession the mandate to do the selling or acquiring a commodity in a free and open market situation. The mentioned option contract tend to broad on the set limitations set in the market which is inclusive of the type one is interested as well as having sold commodity before the time out date.
Basics of Options Market!
There are mainly two major known options which include a call. Call give the owner mandate to acquiring an asset at specified price within a span of time and may be defined as having long position in the stock. Buyers will tend to think of increase of price of commodity before expiry date.
The other form of option is the put. It gives owner right to acquire an asset at a certain cost within a set duration of time and can be simply said as having short position on stock .Buyers in the put will be hoping of a price fall of the commodity stock before the time set for expiry lapse out.
Options Market Overview
As a result there will tend to be participants in the long straddle option strategy which in most cases tend to constitute of; buyers of the puts, sellers involved in puts, buyers associated with calls as well as the sellers in the calls. Besides there are the holders who are known of buying options while writers are known to do the selling where the buyer got longer positions unlike seller who tend to have shorter positions.
There are terminologies associated with Market for trading options such as strike price. It marks the price of stock and will go up for calls and low for puts before any exercise of the position to have profits. Only before the expiry. Options in national options exchange can be termed as listed option. Contain fixed price and expiry dates. Call option Is in-the-money if it has hit above strike price unlike put option which occurring below strike price. Total price on option is termed as premium.