The options market is a derivative market that is traded in contracts. Each contract controls 100 shares of the underlying stock. It is a contract between a buyer and seller, that gives the purchaser of the option the right, but not the obligation, to buy / Sell a specific stock at a specific price on or before a specific date.
There are two types of options:
Call Option: gives the buyer the right to buy the stock at a set price on or before a set date. The set price is referred to as the strike price while the set date is referred to as the expiration sate.
Put Option: gives the buyer the right to sell the stock at a set price on or before a set date. The set price is referred to as the strike price while the set date is referred to as the expiration date.
