Firebirdparts
Best tackle for his weight the old school ever had
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The options have a date and a price. On that date, you have the right to buy at that price (that's a call) or you have the right to sell at that price (that's a put). My broker will execute these automatically if they're "in the money" but you can tell them not to. USA style options can be executed early by the owner. I've never done that, but I would have to call my broker to do it.
The strangest thing about it is the puts and calls are created by ordinary people like us. It's like you can print your own stocks and sell them. This means that there is a lot of selling by people who don't know how they should be priced. you need to think about this. With stocks, you are crowd-sourcing the average idea of what the stock is worth, and generally, even for small stocks, there are a lot of people involved, maybe millions of shares traded. With options, you can find stocks that only a dozen people even try to trade options. Get used to looking at that "open interest" column. You also need to look at the bid/ask difference (they call it bid/ask spread, but spread is confusing). Some are very large because there's nobody willing to trade at all. On boring options that are unlikely to finish in the money, you might see a bid at 5 cents and ask at 20 cents.
A second important consideration is that it's a negative sum game. The "house" takes the bid/ask spread, and after you pay that you're just gambling with other people just as smart as you are.
