Option

An Option is an investment contract that gives the holder of the Option a right – but not an obligation (thus an “option”) – to buy (call option) or sell (put option) a certain asset at a certain price. Certain Options give you the right to exercise the Option whenever (before expiry of the contract), and other Options are only permitted to exercise during a specific date. The former are known as American Options, and the latter are known as European Options.