For this factor, alternatives are often thought about less risky than stocks (if used properly). However why would a financier use options? Well, purchasing choices is basically wagering on stocks to go up, down or to hedge a trading position in the market - what does a finance manager do. The cost at which you consent to buy the hidden security through the choice is called the "strike cost," and the charge you pay for purchasing that alternative contract is called the "premium." When determining the strike cost, you are betting that the property (usually a stock) will go up or down in rate.

There are two different type of options - call and put alternatives - which give the financier the right (but not obligation) to sell or buy securities. A call alternative is an agreement that gives the financier the right to purchase a certain quantity of shares (typically 100 per agreement) of a particular security or product at a specified rate over a particular

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