An option is a derivative of an asset that gives an owner the right but not the obligation to transact the underlying asset at a certain date for a certain price, known as the maturity date and strike price, respectively.
A call option gives the buyer the right to buy an asset by a certain date for a certain price. A seller or writer of a call option is obligated to sell the underlying security to the buyer at the agreed price, should the buyer exercise his/her rights on the agreed date.
A put option gives the buyer the right to sell the underlying asset by a certain date for a certain price. A seller or writer of a put option is obligated to buy the underlying security from the buyer at the agreed price, should the buyer exercise his/her rights on the agreed date.
The most common options that are available are the European options and American options...
