Options are basically bets. This gives you the right to sell 100 shares near the current price. This gives you the right to buy it near the current price. When institutional investors do it on a grand scale, it's called program trading. Only after you've moved beyond basic investing, and even then proceed with caution.
Options really run counter to a long term investment plan.
Again, for those beyond the basics. This is a deal in which you sell a stock you don't own. To accomplish this, you tell your broker to borrow it from someone who does own it, sell it, and then buy it back. The assumption is that in the interim the price will have gone down. You need a margin account in order to do this.