How does trading in Stocks differ from trading in Options?

There are several key differences between stocks and options trading:

• Expiration Date: Options come with a fixed expiration date, meaning you must trade or exercise them before that date. Stocks, however, do not expire—you can hold them indefinitely.
• Delivery: When you purchase stocks, you pay the full market price and take ownership of the shares. With options, you are buying a contract that gives you rights, but no physical delivery of the stock occurs. Options are usually settled in cash, and physical delivery of the stock does not occur in most cases. Profits (or losses) are credited to your account upon settlement.
• Investment Size: Buying stocks requires paying the full market price upfront. In contrast, purchasing an option contract requires paying only a premium, which is usually much smaller, allowing you to control the same stock exposure with less capital.