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Options have value only under certain conditions. A call option with a strike price that is higher than the current stock exchange rate is said to be out-of-the-money. Its value is actually negative, although in truth, it can never be below zero. When the strike price of a call option is lower than the stock exchange rate, it is in-the-money. Put options are out-of-the-money when the strike price is lower than the current exchange rate and in-the-money when the strike price is higher than the exchange price.

Although the strike price is negotiated between the buyer and seller, they are usually only available at specified intervals. Common intervals are $2.50 up to $30 and $5 thereafter. Options with unreasonably high or low strike prices can be written in theory, but if too far out of range, it could be difficult to find a seller or the premium would be much too high to justify the purchase.

In addition, not any expiration date can be chosen. Stock options are given a month of expiration, and they expire on the Saturday after the third Friday of the month. In most cases, the maximum time period for stock options is 9 months from the month of purchase, but long-term options, called LEAPS, may also be available.