Equity options are financial derivatives that provide the holder the right, but not the obligation, to buy (call option) or sell (put option) a specified quantity of a company’s stock at a predetermined price within a set timeframe. These contracts offer investors the opportunity to benefit from price movements in the underlying stock without owning the shares directly. The price of equity options is influenced by factors such as the stock’s price, volatility, time to expiration, and the exercise price.
