Options are derivative security that lets you speculate on the price of an underlying asset without actually owning it. They can be very profitable but also come with high risks and may not be a good fit for everyone. They are categorized into two types: call options and put options. A call option gives you the right to buy a security at a certain price in the future, while a put option allows you to sell a security at a certain price. The most popular type is called options, which lets you lock in a price to buy a stock by a specific date. They can increase in value when a stock rises, so they’re often popular with traders looking for big gains. However, it’s important to remember that the stock market is constantly moving, so it’s not always easy to predict when prices will move. This is why it’s a good idea to look at the potential downsides of options before making a decision. Another type of option is put options, which allow you to sell a security at a specified price within the expiration date. This is similar to call options, except it’s more regulated. Like calls, put options can be divided into ‘in the money’ put options, at the money put options, and ‘out of money’ put options. The money put options have a higher strike price than the current stock price, while out-of-the-money put options have a lower strike price than the current stock price. In general, options contracts are short-term. They’re usually 30, 60, or 90 days long but can last up to a year. They’re traded in the futures markets and can be useful for risk hedging or hedging existing positions. In addition, they’re available on exchange-traded funds, stocks, indices, and commodities. The Chicago Board Options Exchange offers weekly options, which are available for various stocks and indices. These options are listed every Thursday, with expiration dates six weeks from that day. It’s a common misconception that weekly options are only available for one week, but that’s not true. Instead, they’re available each week except for the third Friday, the expiration date for monthly options.