Stock options are contracts that represent the right to buy (or sell) shares of the underlying equity at a predetermined price, and by a predetermined date. Stock options are traded in units ...

This is simple arithmetic: options are cheaper to buy than the stocks from which they derive their value. If a stock is trading at $50 per share, it would cost you $5,000 to buy 100 shares.

If you are thinking about starting to dip your toes into the world of options trading, MAPsignals Co-Founder Lucas Downey has some terms you should know. Watch the video above to learn what ...