What is traditional option?
1 answersQuestion asked ( August 15, 2009 , Shopping / Finance )
I’m lost in the world of finance. I know i’m only over a week old in the world of trading and corporate finance. But there are so many terminologies and so much to know that i get so lost and confused easily. Can someone explain to me in simple terms what a traditional option is?
Answers to : traditional option...
Answer
Traditional options on shares is an over the counter agreement between a single buyer and single seller, which are private and confidential. The option is unlike a traded option which has standard published contract terms and conditions. This option is not negotiable in the secondary market as they are locked –in till the exercise date. Traditional options on shares have the right of buying (call option) and selling (put option) of shares within the agreed time frame. Double options give the right to buy or sell.
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