looks like everything has been answered here..
but just to add my comments - think of options as a form of leverage - they can magnify your gains, but if the option expires out of the money, you end up losing the premium, so while your losses are limited, there is a real possability you'll lose your premium.
Bottom line: If you don't have the money to cover the premium, don't trade options. If you know for sure a stock will go up (usually insider information gives you this edge) then buying options rather than the stock is the way to go
