Part 2 Candle Stick Pattern

Strike Price and Expiry Date

Every option has a strike price (the agreed-upon price for buying/selling) and an expiry date (the last date the option can be exercised). These two factors determine an option’s time value and overall profitability.

Premium – The Cost of the Option

The premium is the price paid by the buyer to the seller (writer) of the option. It represents the maximum loss for the buyer and potential profit for the seller if the option expires worthless.