Option

An option gives the buyer the right (but not the obligation) to buy (call option) or to sell (put option) a defined amount of a particular asset at a later date and at an agreed price. The seller has the obligation to deliver to (call option) or to take (put option) that asset from the buyer. Therefore the seller gets a premium. The height of the premium depends on the parameters of the option. If the buyer doesn’t exercise the option at the agreed date, it expires.

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