What is option Trading in share market

Option trading is a type of financial trading where individuals buy and sell options contracts. These contracts give the buyer the right, but not the obligation, to buy or sell an underlying asset (like stocks, indices, or commodities) at a predetermined price (called the strike price) within a specific time frame.

Key Concepts in Option Trading:
Call Option:

It gives the buyer the right to buy the underlying asset at the strike price before the expiration date.
Buyers of call options profit when the price of the underlying asset rises above the strike price.
Put Option:

It gives the buyer the right to sell the underlying asset at the strike price before the expiration date.
Buyers of put options profit when the price of the underlying asset falls below the strike price.
Option Premium:

The price you pay to buy an options contract.
It is determined by factors like volatility, time to expiration, and the difference between the current price and strike price.
Expiration Date:

The last date on which the option can be exercised.
Strike Price:

The predetermined price at which the underlying asset can be bought (call) or sold (put).
Participants in Option Trading:
Buyers: Purchase options contracts to speculate on price movement or hedge risks.
Sellers (Writers): Sell options contracts to earn premiums. They assume the obligation to fulfill the contract if the buyer exercises it.