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The concept of options has been around for centuries, with early forms of options used in ancient Greece and Rome, primarily for agricultural commodities. However, the modern, standardized options market as we know it today began to take shape much later. Key ...

There are two fundamental types of options: Call Options: Give the buyer the right to buy the underlying asset at the strike price on or before the expiration date. Buyers of call options are bullish on the underlying asset, meaning they expect its price to...

Exercise Price (Strike Price) Definition: The predetermined price at which the underlying asset can be bought (for a call option) or sold (for a put option) if the option is exercised. Significance: The strike price, along with the current price of the und...

The payoff from an option at expiration depends on the relationship between the strike price and the underlying asset's price at that time. Call Option Payoffs: Buyer (Long Call): Payoff: Max(0, Underlying Asset Price at Expiration - Strike Price) Profit:...