A call and put option is where both the options (call and put) are joined and the owner of the options buys the rights to either sell or buy a given number of stock or securities at an agreed future date and at the set price. When the call and put option are integrated, the result is known as double option.
A call option can be purchased or obtained by those who speculate that the future price of the security will likely increase. The investor is likely to buy the securities at the current price, which is usually lower, and sell them at the specified future date when the value of the securities has gone up. However, the investor can fail to sell or buy the option if the price he expected in the future has not increased as he had previously expected. Those who expect share prices to fall normally secure puts options. Before securing the right to buy the put option, there is a premium paid by the speculator to the seller of the option.
Another name for the premium is option money. Those who do not exercise the call or put option will only lose the premium. Therefore, the amount of money lost by the speculator depends on the amount of the premium. Individuals who want to profit from the fluctuations in price but are not willing to loose their capital prefer entering into such deals. The double option can be regarded as a gamble in that the speculator can be able to sell or buy only if he can make profits.
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