Options are derivative financial instruments, which means their value is based on the value of an underlying asset or security. They provide the buyer the right, but not the obligation, to buy (call option) or sell (put option) the underlying asset at a predetermined price (strike price) within or at a certain period (until the expiration date).

Understanding the terminology associated with options trading is essential. Some basic terminologies include:

– Call Option: A contract that gives the buyer the right to buy the underlying asset at a predetermined price within a certain period.

– Put Option: A contract that gives the buyer the right to sell the underlying asset at a predetermined price within a certain period.

– Strike Price: The predetermined price at which the underlying asset can be bought or sold.

– Expiration Date: The date after which the option contract is no longer valid.

– Option Premium: The price paid by the buyer to the seller to acquire the right to buy or sell the underlying.

– Reference: [Investopedia: Options Basics](https://www.investopedia.com/options-basics-tutorial-4583012)