So what is option trading, you ask? Options are one class of a number of financial instruments known as derivatives. They are called "derivatives" because their price action is derived from the price action of another "underlying" financial instrument. The most commonly known of these is stocks (shares) but you can also have options on currencies, commodities and even real estate.
Definitions
What is option trading without its own unique language! So let's define some concepts. An option contract gives the owner the right, but not the obligation, to buy or sell a given item for an agreed price (called the "strike price") up until an agreed expiration date. If you are able to buy that item for a strike price which is less than the current market price at the time you want to do it, then your option contract has what they call "intrinsic value". But the more common description for them is "in the money". Conversely, if you're in a position to sell an item for more than it's current market price when you choose to do it, then you also have "intrinsic value".
So your aim should be to either "call" on the market to sell you shares for less than today's share price, or alternatively, be in a position to "put" your shares to the market for more than today's price. This is where "call options" and "put options" come in. We can see by now, that buying "call options" is a good idea when you think the underlying price will rise, because they will become more profitable as that occurs. Put options on the other hand, is your derivative of choice when you think the underlying share price will fall.