An options contract gives the holder the right—but not the obligation—to buy or sell the underlying asset at a set price on or before a certain date. There are two primary types of options: A call option gives you the right to buy a stock, while a put option gives you the right to sell a stock. The strike price (aka exercise price) is the price at which you buy or sell the stock should you opt to exercise the option. The expiration date is when the options contract expires and becomes worthless. Because options derive their value from underlying assets, they belong to the group of securities known as derivatives.