Opties

Opties, or options, are financial instruments that give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price within a defined period. The most common forms are call options, which give the right to buy, and put options, which give the right to sell. The seller of an option assumes an obligation to fulfill the contract if the option is exercised. Options may be European style (exercisable only at expiration) or American style (exercisable at any time up to expiration), with variations for other markets.

Key terms include the premium (the price paid for the option), the strike price (the agreed price for the underlying asset), and the expiration date. The option’s value consists of intrinsic value (the immediate exercise value) and time value (the potential for value before expiration). Options are traded on exchanges and over-the-counter, often with stocks, indices, commodities, currencies, and futures as underlying assets.

Valuation relies on models that account for price, strike, volatility, time to expiration, interest rates, and dividends. The Black-Scholes model is a foundational method for European options, while binomial trees are used for a wider range of cases.

Uses of options include hedging risk, generating income (for example through writing covered calls), and speculation. Popular strategies include protective puts, spreads, and more complex combinations such as straddles and strangles.

Regulation and markets: standardized option contracts are typically traded on exchanges with clearinghouses and margin requirements; many products are also traded over the counter with bespoke terms. In Dutch language contexts, opties also means general choices or alternatives, not only financial contracts.