An options contract is a type of derivative instrument that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date. The asset in question can be shares of stock, a commodity, currency, or another financial instrument. Options contracts are traded on exchanges around the world and are used by investors to speculate on the future direction of asset prices. They can also be used to hedge against losses in other investments. Options contracts have two main components: the strike price and the expiration date. The strike price is the price at which the underlying asset can be bought or sold. The expiration date is the date after which the option contract expires and is no longer valid.