Part 1 Candle Stick Pattern

Key Terminology in Options

Before diving deeper, understanding these basic terms is essential:

Strike Price: The price at which the option can be exercised.

Premium: The price paid by the buyer to purchase the option.

Expiry Date: The date on which the option contract ends.

In the Money (ITM): When exercising the option gives a profit (e.g., a call option when the stock price is above the strike price).

Out of the Money (OTM): When exercising the option gives a loss (e.g., a call option when the stock price is below the strike price).

At the Money (ATM): When the stock price and strike price are almost the same.

Underlying Asset: The financial instrument (like a stock, index, or currency) on which the option is based.