What are Options?

An options contract is an agreement between two parties that gives the holder the right, but not the obligation, to buy or sell the underlying asset at a specified price (known as the strike price) within a specified time period (known as the expiration date).

Option investing can be used for a variety of purposes, such as hedging against potential losses, generating income through the sale of options contracts, or speculating on market movements. However, option investing can also be risky, as the potential losses from options trading can be significant if the market moves in an unexpected direction.