Part 11 Trading Master Class With Experts

1. What Is an Option?

An option is a financial contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset (like stocks, indices, or commodities) at a fixed price within a specific time period.

The right but not the obligation makes options unique.

The underlying asset could be Nifty, Bank Nifty, stocks like Reliance or TCS, commodities like gold, etc.

The agreement is always between two parties:

Option Buyer (Right, Limited Risk)

Option Seller / Writer (Obligation, Unlimited Risk)