Option

An option is a financial instrument derived from the value of underlying securities, such as stocks, bonds, or commodities. It is a type of derivative contract that grants the buyer the right, but not the obligation, to buy or sell the underlying asset at a predetermined price (strike price) on or before a specific date (expiration date). There are two main types of options: call options, which give the buyer the right to buy the underlying asset, and put options, which give the buyer the right to sell the underlying asset. Options are used for various purposes, including speculation, hedging, and managing risk in financial markets.