Options for Trading Optipns Assets: Calls and PutsTwo types of options are traded. One kind, a call option, lets you speculate on prices of the underlying asset rising, and the other, a put option, 4sared you bet on their fall. Call options usually rise in price when the underlying asset rises in price.When you buy a call option, you put up the option premium for the right to exercise an optiHow a Call Option Trade WorksYou can think of a call option as a bet that the underlying asset is going to rise in value.
Still, no explanation good enough for a child. Let me think of lollipops. Suppose a child has a bag of lollipops. Now, the shop still sells the bag for the same amount, or at a discount, so the friend will not buy the options puts calls dummies 4shared. The other way around, the friend of the child writes a put option for the worth dummiess the bag -1% in one month. The buyer pays a premium to the seller for this right. Both are commonly traded, though in basic finance for clarity the 4shwred option is more frequently discussed, as it moves in the same direction as the underlying asset, rather than opposite, as does the put.
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