Updated on March 7, 2023
Option classes are used to categorize options on an exchange for investors. Option class refers to the total of all ‘call’ or ‘put’ options available for the same underlying asset. The number of options available for purchase or sale within a given option class will depend on the size and trading volume of the underlying asset, as well as market conditions. Option class refers to the type as well as the style of option and will be similar in contract size and exercise style.
Importance of Option class
The number of options to buy (calls), the number of options to sell (puts) and the premiums paid and received for these options can give insights about the security’s expected volatility and also its direction. The Option class also helps in getting a better understanding of the market sentiment towards a particular security.