Types of Options
5paisa Research Team
Last Updated: 07 Apr, 2025 02:37 PM IST

Content
- What are the different types of Options?
- Call Options
- Put Options
- Payoffs for Options: Calls and Puts
- Applications of Options: Calls and Puts
- Types of Options Based on Underlying Security
- Types of options based on Expiration Cycle
- FAQs:
What are the different types of Options?
Investors consistently seek ways to diversify their portfolios and hedge against potential losses in other asset classes. One of the most widely used financial instruments in this regard is Options. An Options contract is a financial instrument that gives buyers the right but not the obligation to buy the underlying assets at a predetermined price on a future date.
As the underlying assets in an option chain can include stocks, bonds, ETFs, commodities, and more, options contracts offer a great way to diversify and maximize profits. The option chain consists of two main types of options: Call Options and Put Options, each providing unique advantages for traders based on market conditions and strategies.
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