What is the work of Options ?

Options are derivatives of underlying financial instruments like stocks, commodities and currencies. An example is curd, which is a derivative from milk. Just as an increase or decrease in milk price affects curd's price, so does the price movement of options.

Options can be traded on MSE, MCX, and other exchanges, just like stocks or commodities. Each option contract includes information about its strike price and premium as well as the lot size, expiry date, and expiry date.

• Strike price: A price at which the seller and buyer of an option have agreed that they will enter into an option contract.
• Premium: A payment made by the buyer or seller in order to obtain his option contract.
• Expiration Day: The last day an option owner can exercise their right.
• Lot Size: A fixed number of units that make up an Options contract.

Options trading is just like any other business transaction. There are buyers and sellers. Options buyers have the right to make a decision and sellers must comply. Buyers have the right to exercise their option to buy/sell options before they expire or opt out to allow them to expire.

There are two options : You can either buy or sell the option with a Call option.

No delivery of options is possible. All transactions must be settled in cash.