While a forward contract or a futures contract creates an obligation to buy or sell an asset, an option, according to Durbin (2010), grants its holder the right, but not the obligation, to buy or sell something at a given price, on a specified date or earlier. Hull (2008) states that there are two basic types of options: call option, which grants its owner, known as the option holder, the right to buy an asset at a certain price on a given date; on the other hand, the put option grants the holder the right to sell the asset at a certain price on a given date.