Plain-English definitions, reviewed by an independent investor
Options
Options are contracts giving the right, not the obligation, to buy or sell a stock at a set price before a date.
Options are contracts giving the right, not the obligation, to buy or sell a stock at a set price before a date.
(Premium buys a right; strike and expiry define it)
Why it matters
They offer leveraged bets and income strategies beyond owning shares.
Common confusion
Time decay erodes value daily; most retail options expire worthless.
Frequently Asked Questions
Call vs put?
Calls gain when price rises, puts when it falls.
Why do options lose value?
Time decay and falling volatility shrink the premium even if the stock sits still.