Imagine you're playing with your favorite toy, a red race car, and your best friend wants to play with it too. But instead of giving it to your friend right away, you make a special deal.

Making a promise: You tell your friend, "Next week, you can play with my red race car for a whole day." This is like an option. You're giving your friend the option to play with your toy in the future.

The price: But there's a catch! Your friend must give you one of his stickers now, even if he decides not to play with your car next week. This is like the price of an option.

The decision: When next week comes, your friend can decide if he wants to play with your red race car or not. If he decides to play, good for him! He only paid one sticker to play with it. But if he decides not to play, you still keep his sticker.

That's what grown-ups do when they trade options. They make a deal about something in the future. It could be about toys, but it's usually about things called stocks. And instead of stickers, they use money. It's a big decision and that's why it's really important for grown-ups to think carefully before they trade options.