Options Agreement Definition

The buyer must pay the premium in advance when concluding the contract. As long as the market shifts in favor of the buyer, they can use the potential profit. Buyers buy calls if they think the price of a particular asset will go up and sell if they think it will go down. The advantages for the owner of the property are that an option agreement guarantees the sale of a property in an unstable market or allows the owner to access a non-refundable deposit if the result does not end in a sale. Louise Norris, partner in our commercial property team, explains what an option agreement is and why parties to a land purchase transaction want an option agreement. There are two types of option contracts: call and call options. Both types help investors make a profit based on how they think the underlying asset will fight in the market within a set period of time.. . .