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…
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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,…
The profit and loss of an option position at expiration is a function of the original premium and the difference in price between the underlying and the strike price of…
What is an Option?
Let’s say you’re a fan of the Apple Phone company. In three months, the company will launch its latest phone, estimated to be priced at $6,000 on the market. Being…
Factors to Consider When Selecting an Option
The underlying asset, exercise price, expiration date, contract size, option type, exercise style, premium, and trading method. Although it may seem complex, the factors to consider when choosing an option…