An option gives the holder the right to buy or sell a particular asset at a specified price (the strike price) for a certain period of time. There are two kinds of options, calls and puts. Calls allow the holder to lock in a price at which to buy the stock. Puts allow the holder to lock in the selling price. You buy calls when you think the stock will go up, and you buy puts when you think it’ll go down. Options don’t last forever, though, they have an expiration date. After this date, the holder can no longer buy or sell the asset at the strike price and the option is worthless.