A coupon for a stock
Think of a pizza coupon: "buy a large for $10, any time this month." You are not forced to use it — but if pizza prices jump, that coupon is gold. An option is that coupon, for a stock.
Think of a pizza coupon: "buy a large for $10, any time this month." You are not forced to use it — but if pizza prices jump, that coupon is gold. An option is that coupon, for a stock.