Database Option Trading

Options are highly sensitive to market volatility. Significant price swings can lead to substantial gains or losses. A trader might buy a put option expecting a stock to drop. If the stock instead surges in price due to unforeseen events, the value of the put option plummets.

Call options give buyers the right, but not the obligation, to buy a stock for a fixed price, on or before some date. Buying call options on a stock can be more profitable — but also more risky in percentage-change terms — than buying that stock itself.