Options trading is a type of investment strategy that involves purchasing the right to buy or sell a stock at a specific price within a specified timeframe. This allows traders to speculate on the price movement of a particular stock without actually owning it. Options can be used to hedge existing positions, generate income, or amplify returns through leverage.

There are two main types of options: calls and puts. A call option gives the buyer the right, but not the obligation, to buy a stock at a predetermined price, while a put option gives the buyer the right, but not the obligation, to sell a stock at a predetermined price. Options trading can be complex and risky, so it is important for beginners to thoroughly educate themselves on the subject before diving in.

Key Lesson Concepts:

• Options trading involves buying the right to buy or sell a stock at a specific price within a specified timeframe.
• There are two main types of options: calls and puts.
• Options trading can be used to hedge existing positions, generate income, or amplify returns through leverage.