1. Definition
An option is a right to choose, that is, the buyer has the right to buy or sell an underlying asset at an agreed price at a specific time in the future or within a period of time.
2. Classification by trading venue
– Exchange-Standardized Contracts
– Over-the-counter market (OTC) – terms such as exercise time, exercise conditions and execution price are more flexible.
– Divide by subject matter
– Financial options
– Foreign exchange options
– Equity options
– Commodity options