What is options market /options trading ?

Question

Accepted Answer

Options trading is a type of trading where individuals can buy or sell options contracts based on the price movements of underlying assets.

Options give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price before a certain date.
There are two types of options: call options (which give the holder the right to buy) and put options (which give the holder the right to sell).
Options trading can be used for speculation, hedging, or generating income.
Example: A trader buys a call option on a stock at a strike price of $50. If the stock price rises above $50 before the option expires, the trader can exercise the option and buy the stock at the lower price.
Example: A farmer buys a put option on corn futures to protect against a price drop before the harvest.

Accepted Answer

Options Market. Options are among the most important inventions of contemporary finance. Whereas a futures contract commits one party to deliver, and another to pay for, a particular good at a particular future date, an option contract gives the holder the right, but not the obligation, to buy or sell.                                            Options trading allows investors to speculate on the future direction of the stock market as a whole  or individual securities such as stock or bonds.

What is options market /options trading ?

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