In ancient Greece, Thales from Miletus (600 BC) is considered the first who made this kind of risk mitigation, and Wikipedia describes the story as\u2026The first reputed option buyer was the ancient Greek mathematician and philosopher Thales of Miletus. On a certain occasion, it was predicted that the season\u2019s olive harvest would be larger than usual, and during the off-season, he acquired the right to use a number of olive presses the following spring. When spring came and the olive harvest was larger than expected he exercised his options and then rented the presses out at a much higher price than he paid for his \u2018option\u2019.Before 1848, option contracts were traded outside an exchange. That year this whole market changed because the Chicago board of trade (CBOT) was established. The market, as we know it today, came to be in the 70s with the standardization of the product, price, and the offering on the put options. In 2005 the first weekly options were created.Investopedia describes option contracts as\u2026An options contract is an agreement between two parties to facilitate a potential transaction on the underlying security at a preset price, referred to as the strike price, prior to the expiration date.That simply means that we lock, with a contract between two parties, the today’s price of a financial product by paying a premium, in order for us to be able to have \u201cthe option\u201d to buy it in the future, before its expiration date, at the present\/locked price.Options as securities are categorized as derivatives. Derivatives derive from another financial asset, which is called the \u2018underlying asset\u2019. There are many kinds of option contracts. There are the stock options, that are options contracts that derive from stocks, forex options, etc. Since a stock option derives from a stock, its price is intrinsically\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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