Wealthy Habitat

Where you stand

I want to trade options

If that is you, here is what this situation usually involves, in the order it usually comes up: the things worth checking, what each one is, and where the arithmetic for it lives. None of it says what to do.

  1. Every options strategy has a payoff that can be drawn as a picture; the options guide shows how to draw it for a call, a put, and the positions built from them.
  2. A covered call and a cash secured put are the same trade seen from two sides; the two guides below walk through both.
  3. For any contract there is a maximum loss, a breakeven, a bid ask spread, and a calendar of earnings and dividends inside its life; each is a number that can be found before the trade.
  4. Implied volatility is the market's price for uncertainty, and when it is high the reason is usually visible in the company's calendar.
  5. Position size decides whether a first year of options teaches a lesson or ends the education; the payoff calculator shows a position at any size.
  6. A notebook with what was expected and what happened is how traders find out what they actually believe; the site's notebook keeps one.

Read these

Options from the beginning: calls, puts, and the Greeks in plain words
Covered calls: the whole position, not just the premium
Cash secured puts and the wheel

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A model reads this page and answers from it. It will say when the answer is not on the page. Education, not personalized advice.