Think of a CALL and a PUT as opposites. Expiration: This is the best binary option trading system last date the option can be traded or exercised, after which it expires.
Generally, there are options traded for each month and if they go out years, they are referred to as LEAPS. The same concepts hold for LEAPS as the stock options contracts we’re discussing here. Underlying Security: For our purposes, we will be discussing stock options. Buyer or Seller Status: If you are the buyer, you have control of the transaction.
If you are a seller of an options contract, you are at the mercy of the buyer and must rely on the holder at the other end of the contract. Call Buyer: People trade stock options for myriad reasons. Often times, it is purely for speculative reasons. For example, if you believe that the Swine Flu pandemic is going to become particularly troublesome and a stock with a vested interest in supplying vaccines in large quantities would stand to benefit from such a scenario, then perhaps you purchase an out of the money call option on Novavax.