You might have heard of Options Trading, and how savvy investors use it to maximise their returns. In this article, I’ll explain how Options work and in a subsequent article, I will show you a simple Options Strategy that beginners can use to pocket extra returns. It’s the same strategy that’s also used by Warren Buffett, so stay tuned! Before we proceed, I would like to say that options can be a dangerous tool. While it can bring about huge profit, unprecedented losses can also happen if you do not know what you are doing. It is a complicated instrument where, unlike stocks, prices are determined by several factors that can easily swing from one end to the other. Thus, you should avoid using it if you do not understand its mechanics well. What are Options? An option is a contract between a buyer and a seller which gives the buyer the right to buy (call options) or to sell (put options)...