Understanding Stock Options by the Chicago Board Options Exchange (CBOE) provides a good non-technical introduction to options. It explains the benefits of options, differences between options and stocks, the pricing of options, and it provides some basic options strategies.

Fischer Black and Myron Scholes first published their formula for valuing an option in 1973. Robert Merton independently derived an alternative method for valuing options in 1973 as well. The availability of the Black and Scholes formula for valuing options has helped the options market to grow rapidly.