Dear Sir
sorry to bother you again
I understand a call option is the right to buy and a put option is the right to sell.
I do not understand buying AND selling of a call option and selling AND buying a put option, I thought a call option was buying and a put option was selling.
It is like a haze and I can sometimes muddle through it correctly and sometimes not (usually in the exam). Is there a hard and fast rule for all of the above
Ask the Tutor ACCA AFM
Currency options
8y ago#1The option is the right to buy or sell at a fixed price on a future date.
However you have to pay for that right. You buy the option (and pay a premium) and that then entitles you then to buy or sell the share/currency/futures at a fixed price on a future date.
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