What are options trading?

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Options are agreements between a buyer and seller to sell an asset at an agreed price in the future. There are two types: purchase options and sell options. Trading options has advantages and disadvantages, including flexibility and the opportunity to withdraw an offer.

An option, sometimes called derivative, is an agreement between a buyer and a seller to sell an asset at an agreed and cheap price, in a specific future deal. The active usually was of the financier type: an action or a future value. As his name indicates, the purchase is optional: the buyer is not obligated to buy the asset, so it decreases or increases its value. Without embargo, the seller is obliged to carry out the transaction if the buyer so decides.

The option trading concept is much easier to understand when applied to a common scenario. Suppose that a buyer who wants to make an actual offer for a home will not tend to actually need it for another six months. He could negotiate a deal with the vendor through whom he will buy the house in six months, at an additional cost of 1% of the sale price. The buyer in this scenario is paying extra for the convenience of being able to buy the house when it suits her.

There are two types of options: purchase options and purchase options. A purchase option gives the buyer the right to buy the asset, at the price previously agreed and on the designated fee. An option to sell gives the buyer the right to buy the asset and then immediately sell it to a third party. In Los Estados Unidos, but not in Europe, it is also possible to ask for an option before the designated offer, if both the buyer and the seller are buying.

Like the majority of financial transactions, the trade in options holds its ventajas y desventajas. A desventaja, for the comprador, is that an inverter can terminate by paying a fee for an option, when the trade is never realised. It turns out, a potential buyer can pay a price now for a future buying option. Without embargo, since the buyer does not want to complete the transaction in the future, if the buyer decides not to complete the transaction, he will lose the price he secured the purchase option. The trading of options generally benefits the buyer, in the place of the seller, who also knows them as the author of the option. Also, some operations require an intermediary or courier, who will also charge a fee.

On the other hand, the trading of options is ventajoso because it is flexible and offers the opportunity to withdraw an offer. The buyer can also keep his money for a longer period of time, allowing these kinds of money to interest him. An option can also be implemented as a form of security to guarantee that the buyer gets credits if he is buying an action or asset that is secured.

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