Listen to a Business English Dialogue About Conventional option
Nora: Hey Eric, do you know what a conventional option is in finance?
Eric: Hi Nora! Yes, a conventional option is a type of financial derivative that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specified time frame.
Nora: Oh, I see. So, it’s like having the choice to buy or sell something in the future at a set price?
Eric: Exactly! It provides flexibility for investors to hedge their positions or speculate on the future price movements of the underlying asset.
Nora: That sounds useful. Are there different types of conventional options, or are they all similar?
Eric: There are various types, such as call options, which give the holder the right to buy the asset, and put options, which give the holder the right to sell the asset. They can also differ based on factors like expiration dates and exercise prices.
Nora: So, it’s essential to understand the terms and conditions of each option before making any decisions?
Eric: Absolutely. Making informed decisions based on thorough research and understanding of the market conditions is crucial when dealing with conventional options.
Nora: Thanks for explaining, Eric. It’s helpful to know more about how options work in finance.
Eric: No problem, Nora. If you have any more questions or need further clarification, feel free to ask!