You can trade in these contracts just like stocks

What are options contracts?
Options contracts are financial instruments that give buyers the right to buy or sell the underlying asset (for example, gold in gold options contracts) at a specified price on a future date. However, there is no obligation on the buyer to buy or sell the underlying asset. An analogy could be a traveller buying a train ticket to some desLEAR tination after two WIT months. The ticket holTHE T der has the right to travel on that date on that particular train, but is not obligated to do the same. If the traveller does not go on the trip, he loses a part or the full price paid for the ticket. Similarly , the options buyer's risk is limited only to the premium paid to buy the option.

Where can you buy and sell options?
Most options contracts are traded on exchanges recognised by the government and regulators like Sebi and the RBI.

How to buy and sell options contracts?
You can buy and sell these contracts on the exchanges through a broker just like you do with stocks and bonds.

What kinds of options are available?
In India, options on stocks, stock indices and gold are traded on the bo urses. Globally , options contracts on several other financial and physical assets could be traded. For instance, options on crude oil, cotton, live cattle and even orange juice and weather could be traded.

What does an options contract specify?
An options contract specifies the price at which the buyer can buy or sell the underlying asset, the duration of the cont ract (from days to months), settlement mechanism, etc.