Options are conditional derivative contracts that allow the buyers of option holders to buy or sell any security at a defined price. The buyers of the options are charged an amount better known as a premium by the sellers. These options are divided into call and put options. In the call option, the buyer of the contract purchases the right to buy the underlying asset in the future at a predetermined price known as a strike price whereas in the put option, the buyer acquires the right to sell an underlying asset in the future at a predetermined price.
