ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Some common synonyms of option are alternative, choice, election, preference, and selection. While all these words mean “the act or opportunity of choosing or the thing chosen, ” option implies a power to choose that is specifically granted or guaranteed.

Detailed explanation-2: -choice, option, alternative, preference, selection, election mean the act or opportunity of choosing or the thing chosen. choice suggests the opportunity or privilege of choosing freely. freedom of choice. option implies a power to choose that is specifically granted or guaranteed.

Detailed explanation-3: -There are four basic options positions: buying a call option, selling a call option, buying a put option, and selling a put option. With call options, the buyer is betting that the market price of an underlying asset will exceed a predetermined price, called the strike price, while the seller is betting it won’t.

Detailed explanation-4: -An option contract, or simply option, is defined as “a promise which meets the requirements for the formation of a contract and limits the promisor’s power to revoke an offer".