An Option pertains to a derivative. It is a contract that provides the buyer with the right, not necessarily the duty, to purchase and sell an asset at a date designated to be its expiry within a particular price.
There are two kinds of Options:
● Call Options
This is the more basic between the two Options. Investors buy such Calls with the belief that the underlying price of the asset may increase. They also sell Calls if they see the prices decreasing at any point in time.
● Put Options
This type of Option has the seller, also called a writer, of the Option obligated to buy the asset should the Put buyer exercises their option. Investors purchase Puts should they see that price of the asset would decrease. Inversely, they sell Puts if an increase is in the cards.