Fool's School Options, in a Nutshell

Imagine that you want to invest in Tattoo Advertising Co. (Ticker: YOWCH). You can buy shares the usual way - or you can use options. There are two main types of options: calls and puts. A call gives you the right to buy a set number of shares, at a set price, within a certain period of time (typically just a few months). For this right, you pay a price premium. Puts give you the right to sell shares.

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