I am new to all this and am a bit confused about the idea of options. I understand the concept of having an option to buy shares at a specified price, but there are a few things I don't understand:
1. can someone confirm if this is right for me? when you buy an option, you pay to acquire it (eg say the listed price is 5c) then when you exercise it you pay to acquire the shares (say the exercise price is 15c) so the total you pay for the option is 20c? And in this example the 5c is paid to whoever owns the option and the 15c to the company?
2. can you buy options that are not listed on asx? I have seen some options which come up on commsec but when I search the stock on asx it says there are no options available over the stock. (eg FNT).
3. how do you exercise an option once you have it? through a platform like commsec or do you have to wait for a paper confirmation?
4. do you buy one option to exercise over one share?
Sorry if this is a bit basic but I'm just a bit confused!