What is options Trading?

Options trading is a financial derivative where you get the right, but not the obligation, to buy or sell an asset at a fixed price before a specific date. There are two main types: 1. Call option – Gives the right to buy at a set price. 2. Put option – Gives the right to sell at a set price. Benefits include lower capital requirements, hedging against risks, and flexibility in trading strategies. However, it carries risks like loss of the premium paid and time decay, which can reduce the option's value. Traders use options for speculation, risk management, and leveraging small investments for potential high returns. It is important to understand market trends, option pricing, and risk factors before trading.