Part 1 of Essay
You buy or trade stocks, bonds and mutual funds. Some investors use options on stocks or cash indexes to protect and insure the value of their portfolios. A major advantage of options is their flexibility.  You can protect stock holdings from a decline in market price  You can increase income against cur ....

Part 2 of Essay
.... of predetermined, limited risk. On the other hand, options writers assume significant risk if they do not hedge their positions. The most basic stock options are buying calls and buying puts. An option is the right, but not the obligation, to buy or sell a stock (or other security) for a specified price on or before a specific date. A call is the right to buy the stock, while a put is the right to sell the stock. The person who purchases an option, whether it is a put or a call, is the option "buyer." the person ....