Option is,
1) The right
2) Not the obligation
3) To buy/sell an asset
4) At a fixed price (Strike/Exercise price)
5) Before a predetermined date
Risk in option = Premium paid, nothing more
Options is either Call(Buy) or Put(Sell)
Options provide,
1) Excellent leverage - Small amount of money control large amount of stock
2) Portfolio hedging
3) Flexibility
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