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CALL OPTION PUT OPTION
Option is a kind of
Financial Instrument. It actually is an agreement or contract based on price
and time. It deals with exchange of ownership of a stock which is optional and
is decided by the owner of the Option.
When you buy an option it
gives you a right but not the obligation to buy or sell the stock (Call
Option and Put Option respectively). It is
completely based on the owner's choice. Owner can go with the agreement by
buying or selling the stock or can just let the expiration date come. Once the
contract is expired, it means nothing. In that case the Option is non-valued
which in turn means that the owner carries a loss equivalent to the premium he
paid for the option.
There are two types of Options:
Call Option
Put Option |