Options are financial contracts that give the holder the right, but not the obligation, to buy or sell an asset at a specified price. A call option gives the right to buy at a set price (e.g., $100), allowing profit if the market price rises above that level. A put option gives the right to sell at a set price, allowing profit if the market price falls below that level. However, options have an expiration date, and if not exercised before this date, they expire worthless.
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Options Trading Explained Simply in 30 SecondsAñadido:
After this video, you understand what options are. A call option gives you the right to [music] buy. If a stock price goes to $150, you still can buy it at $100 because you have the right to buy it at $100. When you buy a put option, you have the right to sell. So, when you lock in the right to sell at $100, if the stock price goes to $60, you'll be able to sell at $100. But, there's a catch. Options have a deadline. If you don't use the options before that date, it's going to expire worthless, and this is called the expiration date.
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