Options can be classified according to the option rights.
Call options are financial contracts that give the holder the right—but not the obligation—to buy a stock, bond, commodity or other asset and instrument at a specified price within a specific time period.
Put options may be contrasted with call options. Put options give the holder the right—but not the obligation—to sell the underlying asset at a specified price within a specific time period.
Based on the previous classification, there are 4 basic trades.
1. Long Call
A trader who expects a stock's price to increase can buy a call option to purchase the stock at a fixed price ("strike price") at a later date, rather than purchase the stock outright.
Example: A long call gives you the right to buy 700 shares o