Buying options

When learning how to trade options, a nice way to start is by learning how to buy stock options. There are two different trades you can buy into when trading options and that is

1.) Buying a CALL

or

2.) Buying a PUT


How to buy stock options

CALLS                                                          PUTS

How to buy stock options? For a CALL, Follow these directions :

1.) On the top left youll see circled in yellow is the word CALLS. When you buy a call , your bias is bullish. You believe the stock will go up.

2.) Now to buy a call, you have to see the next word ASK. Ask is circled in red. Ask means buy. Like "Asking price."

3.) Follow the greenish arrow below the word Ask down to the number $303.20. 

That is the price for this trade (Call side). 

Multiply $303.20 x 100= $30,320.(The price you need to pay).


How to buy stock options? For a PUT, Follow these directions :

1.) On the top right youll see circled in yellow is the word PUT. When you buy a put , your bias is bearish. You believe the stock will go down.

2.) Now to buy a put, you have to see the next word ASK. Ask is circled in red. Ask means buy. Like "Asking price."

3.) Follow the greenish arrow below the word Ask down to the number $.09. 

That is the price for this trade (put side). 

Multiply $.09 x 100= $9.(The price you need to pay).


rules when buying options

1.) GREEKS: You must know that when buying options, the greeks play a VERY big part in affecting them. In buying options, If you don't know the Greeks, and how they work, you LOSE

2.) SPREADS: Know how to find the spread and check if the spread is good or bad. This will help dictate if you take or don't take a trade. If you don't know how to tell if a spread is good or bad, once again, you LOSE!

3.) EXPIRATION DATES: Know your expiration dates and how they affect your trade. Without this knowledge, you are again shooting yourself in the foot.

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