optionstrading
Optionstrading refers to buying and selling options contracts on an underlying asset such as a stock, index, or ETF. An option gives the holder the right, but not the obligation, to buy (call) or sell (put) a specified quantity at a predetermined strike price before or at expiration. Calls rise with the underlying, puts fall with the underlying. Most options are American style, exercisable any time before expiration; European options are exercisable only at expiration. Settlement may be cash or delivery, depending on contract and exchange.
Options are traded on organized exchanges with brokers and market makers. Buyers pay a premium to sellers;
Common uses include hedging, income generation, and speculative bets on volatility. A covered call combines owning
Risks and considerations include leverage and potential large losses, time decay, and changes in volatility. Liquidity,