Options Market

A market in which rights to buy (call) or sell (put) stock, stock indexes, currencies, future contracts, or securities are traded at pre-established exercise prices. On the Options Market, buyers have the right to buy or sell a certain amount of assets at a prefixed price up to a certain date, while sellers are left with the obligation to sell them or buy them as agreed. The buyer who buys a call option hopes that the future price rises. When buying a put option, he expects the future price to fall. The expectation of the seller, however, is the opposite. If he sells a call option it is because he expects the future price to fall. If he thinks that the future price will rise, he sells the put option. The difference of the amount paid and the amount received is called a premium.