Options are financial instruments that give investors the right, but not the obligation, to buy or sell an underlying asset at a predetermined price before a specified expiration date. They are commonly used in trading to hedge risks or speculate on price movements of assets like stocks or commodities. There are two main types of options: call options, which allow the purchase of an asset, and put options, which allow the sale of an asset. Options can be complex, but they provide flexibility and can enhance investment strategies when used wisely.