So today in Airline Ops class, we talked about fuel hedging, and options, financially speaking. We talk often about airlines placing orders for aircraft, and also about the options they have. I understand that an option gives someone the right to buy something at a later time, at a set price. I also understand that there is usually some sort of "fee" (for lack of a better word that I know of) required by the buyer, upfront. So my question is...does anyone have any details on what goes into a contract that has to do with aircraft options? I realize every situation may be different, but I'm juts looking for either general info, or info related to a specific aircraft/airline if you know of any.

Is there an upfront charge? (I guess kind of like a security deposit, but you never get it back, no matter what)
If so, numbers?

Does the agreement guarantee them a spot in 'line'?
Or do they only get in line when the order is confirmed?

Do they have to confirm it before it is built?
Or can they wait till it's completely built?
If so, and they decline, I assume the manufacturer would just give it to the next person in line?
(Now that I think about this one, I wouldn't think this is possible, since aircraft are built for specific customers)

Aircraft prices always go up, so there's never really a bad time to use options, correct?