Editing 1course Stock Market (section)

== Key Terms You Need to Know ==

=== 1. Call Options ===
A '''call option''' gives the holder the right to buy an underlying asset at a specified price (strike price) within a certain period. You profit from a call option if the underlying asset’s price goes up.

=== Example: You buy a call option for Apple with a strike price of $150. If Apple’s stock rises to $170, you can buy it at $150 and sell it at the market price, making a profit. ===

=== 2. Put Options ===
A '''put option''' gives the holder the right to sell an underlying asset at a specified price within a certain period. You profit from a put option if the underlying asset’s price goes down.

=== Example: You buy a put option for Tesla with a strike price of $700. If Tesla’s stock falls to $650, you can sell it at $700, making a profit. ===

=== 3. Strike Price ===
The '''strike price''' is the price at which the holder can buy (for call options) or sell (for put options) the underlying asset.

=== Example: If you buy a call option with a strike price of $100, you have the right to buy the stock at $100, regardless of its current market price. ===

=== 4. Expiration Date ===
The '''expiration date''' is the date by which the option must be exercised. After this date, the option expires worthless.

=== Example: If you buy an option with an expiration date of September 30, you must exercise your right by that date. ===

=== 5. Premium ===
The '''premium''' is the price you pay to purchase the option. It’s the cost of having the right to buy or sell the underlying asset at the strike price.

=== Example: If you pay $5 for a call option, the $5 is the premium. ===