Options are valuable but wasting assets. A put option appreciates when the price of an asset falls, and a call option’s value moves higher when the underlying market rises. The beauty of options is that they give market participants choices. Options can serve as price insurance or speculative tools. The options markets have flourished because of the leverage they allow. Buyers can control a significant position for a small payment, the premium. Sellers can act as the insurance company, collecting the premium.
The primary determinate of the price of a put or a call option