Binance Academy
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What is Options Trading?
Key points
Through options trading, traders and investors can choose to buy or sell assets such as cryptocurrencies and stocks at an agreed price (but are not obliged to exercise the option).
In options trading, the main trading activity and source of profit come from buying and selling the options contracts themselves, rather than trading the underlying assets through exercising the options.
American options can be exercised at any time before expiration, while European options can only be exercised on the expiration date or the exercise date.
Understanding call options, put options, premiums, expiration dates, and strike prices is crucial for making informed decisions in options trading.
Through options trading, traders and investors can choose to buy or sell assets such as cryptocurrencies and stocks at an agreed price (but are not obliged to exercise the option).
In options trading, the main trading activity and source of profit come from buying and selling the options contracts themselves, rather than trading the underlying assets through exercising the options.
American options can be exercised at any time before expiration, while European options can only be exercised on the expiration date or the exercise date.
Understanding call options, put options, premiums, expiration dates, and strike prices is crucial for making informed decisions in options trading.
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