Options and derivatives are complex financial instruments used in various trading and investment strategies. An option gives the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specific time frame. Derivatives, including futures, forwards, swaps, and options, derive their value from the performance of an underlying entity like an asset, index, or interest rate. These instruments are used for hedging against price fluctuations in an asset, thereby reducing risk, or for speculative purposes to profit from anticipated price movements. They play a crucial role in financial markets by providing additional liquidity, enabling price discovery, and offering mechanisms for risk management.