Speculating with options
The flexibility of options has also made them a popular tool for speculation. That’s because the prices that options trade at will vary depending on a number factors, including how much time you have left to exercise your right to trade, and the value of the underlying market. An option to buy gold for $1300, for instance, will typically trade at higher price when gold is at $1299 than when it’s at $1200.
Speculators might trade options with no intention of ever exercising them. Instead, they’ll buy an option then sell it on when its premium increases.
For more information on option price movements, see how to trade options.