Understanding key Option Elements is essential to determining how and when an option will meet your financial objectives. There are 5 key elements to an option. The underlying asset, expiration,…
A call option is the right to buy the underlying future at a certain price. Buy Call Options When traders buy a futures contract, they profit when the market moves…
A put option is the right to sell the underlying future at a certain price. Buy Put Options When traders are short of futures contracts, they profit when the market…
Exercise is the action taken by the option buyer to utilize their right to buy or sell the underlying assetWhile assignment is the obligation imposed on the option seller to…
Traders uauslly tend to use a common set of terms to describe the varying levels of an option. The terms they use are time until expiration, time value, intrinsic value,…