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It is no secret there is something about wall street that puzzles us. Perhaps it is the zoo of unfamiliar products investment bankers and brokerage houses supply and sell to their clients. Products such as: Spyders, Lions, Tigers, Stripes, ETF’s, Swaps, CDO’s SIV's and Options. Yes, Options - and what are they? According to investopedia the following are call and put options.

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Call options are a type of security that give the owner the right to buy 100 shares of a stock or an index at a certain price by a certain date. That "certain price" is called the strike price, and that "certain date" is called the expiration date.

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A Put option is a security that you buy through your stock and option broker when you think the price of a stock or index is going to go down. More specifically, a put option is the right to SELL 100 shares of a stock or an index at a certain price by a certain date. That "certain price" is known as the strike price, and that "certain date" is known as the expiry or expiration date.

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An option is a financial instrument used often to mitigate, lessen or eliminate risk. It can also be used as a tool for speculation. In the evolution of money options are the next step. To further solidify your understanding. Options are a kind of insurance policy. Whole life insurance policies pay the beneficiaries the face amount on the policy upon the death of the insured. Options can be used to pay the investor when what he fears happens. The reverse can be insured as well that is to say, the option can pay if exactly what the investor believes will happen, happens. Since there can only be three things happening to any one stock or company’s stock, that is: they go up, they go down or they stay flat. There are as many strategies to incorporated a desirable outcome using options. Therefore you can use options in your investing strategy.

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See training videos and view opions basics and options lesson two.