Definition: A stock option

Stock Nifty option tips is an agreement between two parties called the seller and the buyer. It is the power to grant the right to buy or sell a stock at an agreed price to the buyer. It is important to take note that this is not a right that can be the buyer's obligation to exercise by the date listed in the contract. The exercise price is the same as the amount for most investors. Buyer will not be able to deny it and to sign the contract, all assets that can be sold by the seller and are written. Assets are defined as part of the equity assets, or equity. Sometimes future contract also includes a list of assets.

There are two types of Stock option tips. It is called the first type regardless of the buyer, a call option to purchase goods listed in the specified price and date of the future of the general market conditions. On the other hand, he is called the second, and to place the option if given the right to sell securities date and price are set to the buyer. Option it is important to note that there is an expiration date. I do not have the right to deal no longer valid when the contract has expired, the rights of the buyer is not allowed anymore.

On the other hand, in order to determine the price of the option, the seller, will adopt several models. These models are evaluated will vary in the future how the price of options in order. The changes are caused by changes in the stock market. In addition, because they depend on market conditions, stock options are considered to be dangerous. Model is considered which is further used, the risk associated with all options, but it may put Stock option , or belongs to a call option.