by Girl Banker
Options are financial products that derive their value from a change in the value of another underlying product. Options can be bought on many underlying products including but not limited to:
An option is a type of derivative. A derivative derives its value from a change in the value of another underlying product. All options give the buyer the right but not the obligation to do a given thing at a given time.
Essentially, options can be viewed as insurance contracts. You get paid if a certain undesirable event happens. The price or cost of an option is called the premium.
Extracted from To Become an Investment Banker
I created my investment banking blog in 2012 as soon as I resigned from i-banking & published my book, To Become An Investment Banker.
Heather Katsonga-Woodward: On Business, Life & Everything In-Between