Volatility is an inevitable part of stock markets; it is arguably one of the most misunderstood concepts in investing. Investing is inherently about risk, but risk works both ways. Each trade carries with it the risk, both, of failure and of success.

Market volatility may provide numerous money-making opportunities for the patient & intelligent trader. This was one of the reasons of beginning of OPTIONS TRADING.

In this article, we will try to understand Options and their types and explore the factors that how one can take advantage of movements in stocks / Indices through option trading.

What are the OPTIONS?

Options are the derivatives instruments which gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date.

Types of Options :

Option, which gives buyer a right to buy the underlying asset for a set price, at certain future date is called Call Option.

Call option generates money when value of the underlying asset is rising upwards.