Can you explain options in a layman language?
Options is like an insurance product. In an insurance, you pay an insurance premium at start of your policy and protect yourself from the risk that you wish to cover. If the risk event does not occur, premium paid by you goes as expense and you don’t claim any compensation from insurance company. However, if event does occur, you claim the compensation for damages. The amount of damage that you could claim is a function of amount insured. If amount insured is more, the insurance premium is also more.
