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What is stock price in options?

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Generally the term stock option which is also known as a call option is a class or rather a type of option. In normal sense by option we mean a choice or an alternative or may be a preference. But in this article by option we mean the rights of a buyer. These rights of the buyer come without any obligation on his part. That is in other words the buyer is free from all types of obligations or responsibility. These options are in the form of a contract between the buyers and sellers. You should know the functions of NSE.

About the rights
Generally the buyers are the ones who benefit the most out of these options. In fact these are designed in a way that they suit the buyer. It provides the buyer with certain rights but without the obligation on these rights. The rights are such that they make it possible for the buyer to either to buy or to sell parts or the whole of the specific assets. So let us have a look on what is stock price in options?

About the buyer and the seller
The right is subject to the conditions that the buyer must sell the specific assets within the time specified in the option. In other words the right of the buyer either to sell or to buy the assets is applicable only if the right is exercised either on the date on which the contract or the option expires or before the date. As such the buyer must try to exercise the right within this option or contract period. Again there is another condition that the buyer should not overlook. This condition is that the buyer can sell or buy the specific assets only at the agreed price. This agreed price is known as the strike price or the option price. Thus this condition implies that the buyer cannot charge any price that he likes from their customers in the case when they sell the specific assets under the option or contract. You can buy stock online. The prices of these options are pre determined and are acceptable by all and as such the buyer too has to sell it at that pre determined price only. Similar is the case buyer goes to buy these specific assets. They should not pay anything more than the strike price or the option price. You should get some attempts to reflect the problems arising in quoting stock prices in options. It would help you learn about the meaning of stock prices in options, its advantages and disadvantages, its features, etc.

Be very cautious
From the above discussion it becomes clear that you have to be very cautious and careful when you either buy or sell the specified assets under the option or contract. Again the buyers must not forget that they are under no obligation to either sell or buy the specific assets. It is a right that is given to the buyer and it depends on them whether or not they want to exercise their rights. Also it depends on them when they like to or in other words how they would like to exercise this right. Although exercising of the right remains at the discretion of the buyer but the buyer must not forget the time frame within which this right is to be executed by the buyer. But the buyer must not be under any sort of compulsion to exercise the right. If the buyer finds it necessary he will exercise his right.
Although I have mentioned that the options or the contracts are designed in a way to suit the buyer that does not mean that the sellers are overlooked. They too have their own share profit. This profit is the return that the sellers get or rather obtain on account of the permission that they have granted to the buyer of the specific assets. This return is in the form of a premium which is given by the buyer. So you have come to know what is stock price in options.

 

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