Traded Options

Traded options are financial contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset—like stocks—at a specific price within a certain period. They are bought and sold on markets, allowing traders to speculate on price movements or hedge against potential losses. There are two main types: calls (rights to buy) and puts (rights to sell). Options can be used to potentially profit from market changes with limited initial investment, but they also carry risks, including the possibility of losing the premium paid if the market moves unfavorably.