Her cousin, Kibo, laughed. “I want upside without the risk.” He bought an — the right, but not the obligation, to buy grass at 55 acorns in two moons. He paid a small premium of 5 acorns. If grass soared to 90, he’d exercise the option and profit. If grass crashed to 20, he’d let the option expire and only lose the 5 acorn premium.
Options give you the right, but not the obligation, to trade.
An Option gives the buyer the right , but not the obligation , to buy or sell an asset at a specific price on or before a specific date.
Synthetic Puts, Protective Puts, and Covered Calls. Advanced: Multi-leg strategies like Collars. 💡 Practical Features