#OptionTrading #TradingInOptions What is Options Trading? | Angel Broking Knowledge Series
An ‘option’ is a contract that permits (but doesn’t necessitate) an investor to purchase or trade instruments like securities, ETFs or index funds at a pre-decided rate after a specified period. Selling and purchasing options are carried out in the options market. An option that permits you to acquire shares sometime in the future is referred to as a “call option.” On the other hand, an option that enables you to sell shares sometime in the future is a “put option.”
Options are considered lower risk instruments than traditional futures contracts used in stock, index and commodity trading. This is because of the fact that one can choose to walk away from or withdraw their options contract at any time. This also means that, unlike stocks, options do not represent having ownership in a company. The market price of the option (also known as its premium) is, therefore, a portion of the underlying security or asset.
Watch this video to understand options trading with example
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Tags: angel broking, how to trade, trade guide, how to open Demat account, trade angel broking, options trading, how to trade in options, option, and futures
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