Unlocking the Power of Options: A Game-Changer in Financial Markets
Options are financial contracts that give you the right to buy or sell an asset. They can be confusing, but they're just arrangements. Factors like moneyness and volatility affect an option's value. Options have an expiration date, so they lose value over time. Understanding leverage and time decay is crucial for managing risk. The relationship between put and call options and the underlying asset is explained through put-call parity.