An options contract is a derivative security that grants its owner the right to buy or sell a certain amount of a stock or asset at a certain price on or before a specific date. Because options ...

it's critical to start with a basic definition of options. These derivatives are contracts that allow the holder to buy or sell shares of the underlying asset at a specific price by a specific date.

There are now about 40 million options contracts traded every day, up from just 15 million contracts in 2010 and less than 2 million contracts in 1999, according to Nasdaq. Sign up for stock news ...

That's the short summary of these options contracts. Now, let's take a closer look at how call and put options work, as well as the risks involved with options trading. A call option is a contract ...