But the variety of securities you have at your disposal does not end there. For the employee incentive, see Employee stock option. The strike price may be set by reference to the spot price (market price) of the underlying tradung or commodity on option stock trading 2013 day an option is taken out, or it may be fixed at a discount or at a premium. The seller has the corresponding obligation to fuAn option is the right but not the obligation to purchase or sell an asset at a specific price, on or before a certain data.
Options trade at a price called a premium which is the amount a buyer pays a seller for the right to exercise an option. The premium of an option stoxk with market sentiment. The value stodk that premium is based on a number of factors which include the underlying. Options strategies can vary in nature, well beyond speculating on the direction of an underlying security or benefiting from time decay.
For traders that are trxding to benefit from increased implied and historical volatility there are strategies that can be employed that earn income as an underlying security gyrates. This type of strategy not only benefits from increasing implied.
Option stock trading 2013