Option

Allows the buyer, but does not require them, to purchase a security at a predetermined price on or before a defined date. There are two types of options; call options and put options. Essentially call options are betting that shares will be worth more than the price the agreed to pay for the option, yielding them gains for all of the value of the share above the option price. While put options are betting against the option price betting that they will fall below the option price.