Options are derivative instruments used for both hedging and speculative purposes.
The right to purchase a specified stock is called the Call option, while the right to sell a specified stock is called Put option.
By definition an option is a legal contract in which the writer (seller) of the contract grants to the buyer, the right to purchase from or sell to the writer a designated instrument or a scrip at a specified price within a specified period of time.
The right to purchase a specified stock is called the Call option, while the right to sell a specified stock is called Put option. There exist many option strategies (tactics), which involves different combination of Calls and Puts, for hedging as well as speculation. Some of such strategies are Bull Call Spread, Bear Call Spread, Call Backspread, Covered Call, The Collar etc.
The following Options Strategies Course is designed to show how options work as a tool for hedging positions and how they can be used for speculative purposes.
