Part 1 Ride The Big Moves

What Are Options?

Options are financial derivatives—meaning their value is derived from an underlying asset such as stock, index, commodity, etc. They are contracts between two parties: the option buyer and the option seller (writer).

There are two types of options:

Call Option (CE) – Right to buy the asset at a fixed price.

Put Option (PE) – Right to sell the asset at a fixed price.

The key point:
The buyer has a right but no obligation. The seller has an obligation but no rights.