Investors can choose LONG (buy) or SHORT (sell) stock options.

• Buyers (holders) --have rights but no obligation to exercise on or before the expiration date.
• Sellers (writers)--are obliged to honour the contracts if the holders choose to exercise.

• Call Option
  
       
  
  Example: Stock A (October) at $90 strike price

  Holder	has rights to buy the stock at $90 (strike price) on or before October	Expect rising of stock price
  Writer	is obliged to sell the stock at $90 if the holder exercises the contract	Expect not rising of stock price

• Put Option
  
       
  
  Example: Stock B (October) at $20 strike price

  Holder	has rights to sell the stock at $20 (strike price) on or before October	Expect falling of stock price
  Writer	is obliged to buy the stock at $20 if the holder exercises the contract	Expect not falling of stock price

Stock option is a contract entered by and shared between two parties, a buyer and a seller. Everyone can long(buy) or short(sell). The buyer has the right, but not the obligation, to trade an underlying asset with the seller at predetermined price, within a certain time.When you long an option, the purchase price is called the premium. If you short, you receive the premium.

Stock options can assist investors to make profits in bullish, bearish or stagnant markets.

Investors can use options to hedge market risks.

Leverage

Stock option is derivative, which can act as a leverage investment return.

Low transaction cost

Stamp duty for stock option does not need to be paid.