Imagine Apple's trading 200 bucks a share.

Imagine Apple's trading 200 bucks a share. You think it's gonna go to 250. Most people just say, then buy the stock. But what if you didn't want to spend 20 grand to buy a hundred shares? What if instead, you could buy the right to buy those shares later if you are right? That's an option. Instead of buying the stock, you're buying a contract. That contract gives someone certain rights regarding that stock. Think of it like putting a deposit on a house. You don't own the house yet, but you purchased the right to buy it at an agreed upon price before a certain date. That's an option. You're paying not the actual stock. Every contract has two sides, a buyer and a seller. Without one, can't have the other. The buyer pays money, it's called in exchange, the buyer receives rights depending of option. To sell. Notice I keep saying because because the buyer gets to choose if the contract becomes valuable, they can exercise it. If it doesn't, they can just simply let just die just die and not use it. Nobody can force the buyer to use. Think about concert. You that ticket. You the right to attend the concert. But here's the important part. You don't have to go if you get sick or change your mind, you simply don't use the ticket. You lose what you paid, that's it, but nobody can you to attend the concert. That's exactly how an option buyer works, doesn't matter. Now look at the other. The venue sold you that ticket. If you show up with a valid, can they say, no, you're in, screw you, not not at all. They can't. They have an obligation. They sold the contract, now they have to let you. Options. The rights. Seller has obligations. Buyers has have. I like exercises. The contract, the seller must fulfill it. That's one of the biggest ideas you'll see throughout chapter. There are only two basic types of options, and a put. A call gives the buyer the right to buy stock. A put gives the buyer the right to sell. We're gonna set up separate videos on each because they deserve a much deeper explanation. So if contracts, why would anyone use them instead of just buying the stock? Well, there are three reasons. First, we have speculation. Stock is going to move up or down, options let you make that bet without buying or shorting 100 shares. Second, protection. Let's say you Apple. You're worried it might fall over the next month or so but don't want to sell it, so you buy. So this way you can sell it at a price. Options can act like insurance. If the stock drops, that option can help reduce or offset of your losses. Third, income. Some investors actually sell options to collect the premium as income. They're hoping the option expires unused so they can keep the premium. We're going to go over each of those strategies in other videos. So now, but here's the thing. Options but they're risky. The reason you leverage. Amount money. A relative small amount of money can control a much larger position. So when you're right, your percentage gains can be really impressive. But when you're wrong, those losses can happen just as quickly. And here's another problem. Expiration. Stocks can sit in your account. It doesn't matter. Options. They last like nine months max. So if the move you're expecting doesn't expiration, your option may actually expire worthless. But if you own the stock, you can sit on it and aren't just about being right before time runs. With stocks, being early can be frustrating. With options, being early can actually be the same as being wrong. SIE. Remember these key ideas. Buyer. Seller. The buyers have rights. Seller has obligations. Calls involve the right to buy. Puts involve the right to sell. Five. You're probably gonna be okay, and you have a good foundation for the chapter. So don't think of options as complicated investments. Think of them as contracts. One person buys the rights, the other accepts the obligations for the money. Once that calls covered calls, protective puts, spreads, straddles, all of those things become much easier once you get the basics. So the next video and show you actually how they work, let's read it