Eli5: what are options in stock trading?
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Options are the derivatives that give you the right to buy (call option) or sell (put option) an underlying (stock, bond, foreign currency, etc) at the
agreement price (strike price) on specific time (date, duration) or any specific event.
Since you buy the right, It is your choice whether to use it. When it is used for hedging, it kinda like you lower your profit to limit your loss.
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