An option is simply a contract that says that within a certain time frame; you will have the choice of buying into an investment at a fixed price - the price being fixed in the contract. There are two ways in which the buyer takes a risk in options trading. First of all, there is a price to pay for the contract.
For the advantage of having a fixed price for the stock you may want later, you have to pay a price. Of course, your contract is an op...
