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Traders task will be to predict if the value of an underlying asset will leave this boundary during a previously established time frame. The two boundaries will always be established based on the value of the underlying asset during the moment a trader purchases a.
The underlying may be commodities like wheat/ rice/ cotton/ gold/ oil or financial instruments like equity stocks/ stock index/ bonds etc. Important Terminology Underlying - The specific security / asset on which an options contract is based. Option Premium - This is the price paid.
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