Call and Put trading options are two kind of option agreement. Generally, most people confused by these two options. These two options work on same principal but they are quite different. As a perfect broker you should not make such mistake because call and put tradingin very important for you.
call and put trading. are very important tools for brokers because these let them to limit the risks of playing the stock market, including with some other financial products such as futures and stocks. The first things you have to consider is that how the market works and then find a suitable trading method. Not only that but also you have to use it effectively. For this you have to understand call and put trading options very carefully. You have to consider what option is? And what is not.
Many people have wrong idea about put trading option and they think put option is trade something in the future. It is not this but a futures contract. You are purchasing a commodity a definite charge in the future. As a manufacturer you are assured that you can purchase the product that you need. One the other hand if you are an investor then you buy with the intension that the charge is going to rise and you can trade in future for benefit. So, put trading option is very impotent
A call trading is the option to buy the fundamental stock at a fixed price by a fixed date (the expiry). The consumer of a call can buy shares at a beat price until expiry. The writer of the call (actually the seller) is with that obligation. If the consumer decides to buy then the call writer is obliged to sell the shares to the buyer at a fixed price.
The actual difference between the call and put trading. is that you are buying nothing but right of selling and buying at a definite price in the future.
You may have confusion at this. Actually is little hard to grasp at first time. Imagine you want to buy a apartment building in the town. You didn?t able to sell your current house but you decide to buy the apartment in this year. So at this time you decide to make a conversation with the apartment owner and offer him the price of the apartment house with 20% on the top of that. You promise that you will pay in the next year and give him a deposit.
In this case you are purchasing an option and it is call trading option. You can purchase or not after a certain time period. One the other hand the owner is obliged to sell the house at the fixed price.
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