What are options?
Cfefinances
Options are a very risky strategy that allow you to buy the right to 100 shares at a much lower price in the hopes that the stock will increase within a certain time period. Usually 3 months. But if the stock doesn’t go up within that time frame, you lose the money. Options are more like a bet. You bet that a stock is going to go up or down within a certain period of time, and if you are right you can make a good amount of money, but if you are wrong you lose the money that you spent on the bet.
Think about paying for the right — not the obligation — to buy or sell a stock at a set price within a window. They're high-risk, almost like a timed bet.