OPTIONS TRADING: 2 BOOKS IN 1: The Complete Crash Course. A Beginners Guide to Investing and Making a Profit and Passive Income + The Best SWING and DAY Strategies to Maximize Your Profit by Ray Bears

OPTIONS TRADING: 2 BOOKS IN 1: The Complete Crash Course. A Beginners Guide to Investing and Making a Profit and Passive Income + The Best SWING and DAY Strategies to Maximize Your Profit by Ray Bears

Chapter 1
What is Options Trading?
Option contracts usually refer to the purchase or sale of certain assets.
An option is a contract between two parties (a buyer and a seller), in which
whoever buys the option acquires the right to exercise what the agreement
indicates, although he will not have an obligation to do so.
Option contracts commonly refer to the purchase or sale of certain assets,
which may be stocks, stock indices, bonds, or others. These contracts also
establish that the operation must be carried out on a pre- established date (in
the case of the European ones, since those of the US are exercised at any
time) and at a fixed price at the time the contract is signed.
To purchase an option to buy or sell it is necessary to make an initial
disbursement (called "premium"), whose value depends, fundamentally, on
the price that the asset that is the object of the contract has on the market,
on the variability of that price and of the period

between the date on which the contract is signed and the date on which it
expires.
Call and Put
The options that grant the right to buy are called ‘Call,’ and those that allow
the right to sell is called ‘Put.’ Additionally, it is called European options
that can only be exercised on the date of exercise and American options that
can be used at any time during the life of the contract.
When the time comes for the buying party to exercise the option, if it does,
two situations occur:
Whoever appears as the seller of the option will be obliged to do what they
said contract indicates; that is, sell or buy the asset to the counterparty, in
case it decides to exercise its right to buy or sell.
Who appears as the option buyer will have the right to buy or sell the asset.
However, if it does not suit you, you can refrain from making the
transaction.

OPTIONS TRADING: 2 BOOKS IN 1: The Complete Crash Course. A Beginners Guide to Investing and Making a Profit and Passive Income + The Best SWING and DAY Strategies to Maximize Your Profit by Ray Bears