# 🧀 Options

**Published by:** [Let Them Eat Cake](https://paragraph.com/@ltecake/)
**Published on:** 2022-06-21
**URL:** https://paragraph.com/@ltecake/options

## Content

TL,DR: Like cheese boards, options vary from basic to bold Options / Cheese Boardcome in all shapes and sizesform of insurance when other products don’t deliveroften require agingmay cause pain after consumptionexciting and high potential goodsEatamology “Options” refers to the flexibility afforded to options buyers in choosing whether or not to exercise the contract and let it expire. This is referred to as exercising the option. Financials At a dinner party, the cheese board insures guests will be satisfied even if the meal takes longer than expected. Options provide a different type of insurance. “Call” options give buyers the ability to buy a stock at a predetermined price by a predetermined date. This is useful if you are short a stock and afraid it’s price may rise. The word call refers to the way the holder exercises the option, buy calling together the counter-party to execute the trade. “Put” options give buyers the ability to sell a product at a predetermined price by a predetermined date. This is useful if you are long a stock and afraid it’s price may fall. The word put refers to the way the holder exercises the option to put the product up for sale at the agreed upon price Where to Find Like futures, options are available on most brokerage platforms, but require proof of substantial financial assets and a sophisticated investing strategy before investors are enabled to trade. The Options Clearing Corporation, or OCC, oversees the trading of options and other specialized financial products. “In the Money” / Ripe An option is “in the money” when the exercise/strike price is less than (call) or greater than (put) the prevailing market price, such that exercising the option will create a realized or unrealized profit for the investor. Long and Short / Believers and Doubters As discussed, long positions are buyers and short positions are sellers. The same rules apply for options. Option buyers are long because they believe the price will move substantially. Option sellers are short because they believe the price will remain stable. If the price does not move and the option expires unexercised, the seller earns profit from the sale while the buyer suffers a loss.

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