Option Trading

An option is that contract that gives any buyer the right to buy or sell an asset at a specific price on a particular time or before that time but it is not an obligation. An option is a security like bond or stock. It has properties and a binding contract with defined terms.

Option Trading therefore involves buying and selling of assets, which can be stock, currency, or any financial instrument, at a particular time. The trader or investor will set the amount they are willing to trade with, make a bet or offer and wait for that time as greed by the other party. If the price turns positively, they make profit. On the other side, if the price goes down after the time expires, they lose their money.

The process can be controlled by setting the percentage you are willing to risk. The higher the risk the higher the returns.

This type of trading is common with regular day traders who make multiple trades within a day. To some extent, it is seen as gambling.