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Options

An option is a type of financial instrument classed as derivatives because they derive their value from an underlying asset. An option gives its holder the right, but not the obligation, to buy or to sell some asset (underlying) on or before the option's expiration at an agreed price, the strike price.

In return for granting the option, the seller collects a payment (the premium) from the buyer. Granting the option is also referred to as "writing" the option. In many cases the option can be sold only by its original buyer, and this is why the distinction between the term "seller" and "writer" is useful when describing options. It is the writer who is the particular seller who must make good on delivering (or receiving) the underlying asset or its cash equivalent, not any seller.

A call option gives the buyer of the option the right but not the obligation to buy the underlying at the strike price.
A put option gives the buyer of the option the right but not the obligation to sell the underlying at the strike price.
Options are a useful instrument to use to take a position on a market view. In particular, buying an option allows the buyer to take a market view and to limit the risk to the price paid for the option.

At LanceBank we have developed an easy to use Option Wizard to help you quickly & easily design an option to meet your market view and trading time frame.

With Option Wizard just choose the market scenario that reflects your view, follow the easy steps and then execute your trade! Option Wizard will propose you a selection of single options or option strategies which fit your market view and let you trade on an online quote.

Option Wizard together with traditional option trading provides you with choice: you can easily select either a single option or a structure, fine-tune it and then obtain execution in via LanceBank One Click strategy tool.

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