by 
The Curious Bag
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Stock options are contracts that give the buyer the power to buy or sell a stock at an agreed-upon price in the future. You can trade these options in a way similar to trading stocks, according to Zecco.com.
Types
Call options give someone the right to buy a stock. Put options give you the right to sell a stock.
Option Premium
You must pay an option premium for the right to buy or sell a stock at a later date. This fee is based on the inherent value of the stock, its volatility history and the amount of time the right to buy or sell would last.
LEAPS
A long-term equity anticipation security (LEAPS) option lasts for two years. These options always expire in January, according to Zecco.
Pros and Cons
Buying options with the hope of future profit is cheaper than buying stocks. Options trading is considered a speculative investment, and losses are possible.
Consideration
Options holders do not have all of the rights stockholders do regarding receipt of dividends or company-related voting.
Source:
Options Trading Education Basics
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