Buying an option when stock market trading is not quite the same as buying a stock. Options are actually a form of leverage, or a way to access a lot of money, with only a little money. The downside to the approach is that it doesn't come without its risks, you can make a large amount of money in options, but you can also lose up to the stock's full value if things don't go right.

A stock option is simply an option to buy stock at some point in the future for a pre-agreed price - no matter what the market price at that time is. You are under no obligation to exercise your option (i.e. buy the stock) if you don't want to, but there may be restrictions on when you can exercise them. It might be that you can only buy on specific days, or it may have an expiration date, or you might not be able to exercise the option until the stock hits a certain price.

Stock market trading differs from an option trading strategy in regards to the fact that option trading strategies vary on the types of options. Availability of options are on the exchange which includes stock and bonds, commodities, and futures to name a few. It can also be available through over the counter options for example, interest rate.

Figuring out the value of options is problematic. When you own an option, you don't actually own a thing, you own the potential to own a thing. Many models have grown up over the years to figure out what that's worth, and at least one of them has won the Nobel prize in economics for its contributions to financial understanding. Unfortunately most of the pricing models are quite complex and take a fair bit of effort to understand.

But all the models rely on four basic actions: short and long puts and calls. Call and put refer to the option to buy or sell the stock at a fixed price (specifically at the time of the put or call). Long and short refer to different option strategies for managing the puts and calls depending on whether the stock is expected to increase or decrease in stock market trading.

I should remind you again that financial stuff can be complex and hard to understand. For that reason, do not think that you will learn it simply by practicing. Without having adequate knowledge, trying to learn things by trial and mistake can result in your bankruptcy very quickly. Keep in mind old gambler's rule: if you do not understand a bet, stay away from it and do not put money.

Taking a stock option contract is different from just purchasing shares when you are stock market trading. There are four basic actions in regards to stock trading. They are either short or long and puts or calls. Puts or Calls have to do with when to buy or sell a stock at a specific price. This refers to either the time of the put or the call. Option strategies are based on long and short managing of said puts and calls. This is all dependent on the expectancy of the rise and fall in the stock market. Remember, just trading differs from an option trading strategy.