Okay, now we’re talking about the question, “What is an option?” So perhaps you’re brand new to options. You’re wondering, “Okay, are options for me?” I’m here to give you my do believe perspective. I do believe that if you’re in the stock market, period, I do believe you should be trading options. Throughout your time at OptionsANIMAL you’ll come to understand why I feel so passionate about that.
But let me answer this question, “What is an option?” Just like a bond or a stock, it is a security. It is a contract between two parties. Options sometimes are viewed as just purely risky. That’s not entirely true. They can be risky. They can also be incredibly safe if you use them correctly. The way to look at this contract, when you’re buying an option, you have the absolute right to do something with a stock.
When you’re selling an option, you have the absolute obligation to do something with a stock, and that is the simplest answer I can give to the question, “What is an option?”