The abundance of choice among various kinds of options can get a trader torn up. How can one decide which trading instrument is right for them? No worries: we’ve prepared a comprehensive guide that will help you make the right choice. Back to basics Let’s start from the beginning by defining what an option in its general sense is: An option is a contract which gives the holder the right (but not the obligation) to buy or sell a unit of an underlying asset at a specified price on a specified date. An option with the right to buy at a specific price is referred to as a Call, while an option to sell is known as a Put. The basic goal, however, is the same for both types: to profit from the difference between the buying and the selling price. Options can further be divided into various styles (also known as ‘families’), with the vast majority falling under either European or American style. European vs American options These two option types share many similar characteristic, but it’s thei…