Part 12 Trading Master Class With Experts

Types of Options

There are two main types of options:

Call Option – A call gives the buyer the right to buy the underlying asset at the strike price before expiration.

Traders buy calls when they expect the price of the underlying asset to rise.

Put Option – A put gives the buyer the right to sell the underlying asset at the strike price before expiration.

Traders buy puts when they expect the price of the underlying asset to fall.

Each option can also be American-style (exercisable anytime before expiry) or European-style (exercisable only on the expiry date). In India, most index options like NIFTY or BANKNIFTY are European-style.