Module 1Lesson 1Preview
Options Fundamentals
CU
CASE University
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Options Fundamentals
Module 2
Calls & Puts
Module 3
Options Pricing & Greeks
Module 4
Options Risk Management
Module 5
Options Scalping
Module 6
Options Swing Trading
Module 7
LEAPS
An option is a contract that gives its buyer a right and creates an obligation for its seller under defined terms.
An option is a contract that gives its buyer a right and creates an obligation for its seller under defined terms.
A call concerns the right to buy the underlying asset; a put concerns the right to sell it. The contract specifies an underlying, strike price, expiration, and premium. The buyer controls a right, while the seller accepts the corresponding obligation if assigned.
Worked options scenario
A $50 call gives its holder the contractual right to buy at $50 before or at expiration according to the contract style. Profit still depends on premium, timing, and the underlying price.
Knowledge check
Correct answer: A contractual right
The buyer receives a right; the seller accepts the corresponding contractual obligation.
Knowledge check
Correct answer: Define thesis, payoff, maximum loss, liquidity, and expiration plan before entry
Options decisions require a complete payoff and risk plan; premium price alone is not sufficient.
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