Option types

There are two types of options:

 
- Call option

- Put options

Call option gives the holder the right (but not the obligation) to purchase such shares until the expiration of certain options by right (pre) determined price.

Put - option gives the holder the right (but not the obligation) to sell such shares of certain firms to the date of expiry of the options at right (pre) determined price.

Buyer Call options - buyer buy an option with the expectation that the price of (eg) the shares rises above the executive (strike) price at which the voice and thus wants to make a profit. In contrast to the purchaser, the writer-Call options (and the holder of shares) is hoping that stocks will rise over the price at which the voice option and that option will expire worthless and he left the entire premium, which is collected. Many large investors are earning good money on writing options and performance statistics, i.e. default option is going in favor of them.

In the event however that the price of that stock rises above the price of the option and the holder submits to the execution, the writer has the option to sell their shares at a price that was "promised" that is listed as an option. So he has to sell their shares below the price that is currently on the market or purchase option which I wrote back and pay to the holder of a market recognized the difference in price.

Buyer Put options – buyer buys an option with the expectation that the price of (eg) the shares fall below the executive (strike) price at which the voice and thus wants to make a profit. In contrast to the purchaser, the writer Put - Options are hoping that the price of that (eg) the shares will not fall below the price at which the voice option and that option will expire worthless and he left the entire premium, which is collected. If the price falls below the price specified in the option, the option writer is obligated to purchase from the holders of stock options at a price that was "promised" that is listed as an option. So he must buy shares at a higher price than the current market.

On the other hand, the option holder can buy the same stock cheaper in the market and then sell them on the basis of the options.

Derivatives

Derivatives are a specific form of securities that are (such as their name implies) derived from a base instrument which can be stocks, bonds, various indexes, currency exchange rates, stock goods, etc. Derivatives are therefore securities which represent abstracted piece of the value of a property from which they derived a period of time. In fact, derivatives are a kind of standardized, market-regulated contract in which two sides of the predetermine the subject, price and timing of the sale and that they are standardized and regulated in the specific markets enabled the trade as well as other securities. The main purpose of derivatives is the provision of market risks (all kinds), but are also one of the most speculative types of securities traded in the market.

There are several types of derivatives and the most basic are:

- forward contracts (futures, forwards, swaps)

- option contracts (options)

Because of all these types of derivative options by far the best known and most widely used as a form of investment or speculation, we will devote most attention to them. The very word "options" derives from the Latin word "optio" meaning the dial. In the financial context for options can be translated as a choice, the act of dialing.

The very word "options" derives from the Latin word "optio" meaning the dial. In the financial context for options can be translated as a choice. Options are financial instruments that entitle customers to buy or sell a certain good (eg shares and to a certain number of shares for a specified price), or the exact date. What is most interesting for the options is that they provide the buyer the right but not the obligation to exercise this right. Buyer to do their "real" wages so. option premium, which actually represents the price of the options like paper. On the other hand, the "writer" option from the customer is charged a premium option, regardless of whether the buyer (or decision) is consumed to his right. Each option has its own life, and after that date the option becomes worthless. Most of the options just as well finish since the holder does not provide convenient shopping good, which is subject to the options expiration date. Yet, as a means to achieve fine speculative profits are options in the last 10-odd years has become one of the biggest challenges many people around the world!