Add to JAL777's post...
I want plane X now... price: 20M USD
in 5 years time, I believe price of X would be 25M USD
I order 10 X now, with an option of 10 X valid for 5 years.
Option price = 0.1M USD per year per aircraft.
If at the end of 5 years I don't need the extra planes, I'll let the manufacturers keep 5m USD from the options.
If at the end of 5 years and the price
IS 25M USD each, I would have saved 45M USD thanks to the option for 10 planes.
Just a simplified example...
Mandala499