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Options Trading Basics | 9 Simplified Guides w/ Visuals

beginners options

Learn the absolute essential options trading concepts!

Options Trading Explained

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What is options trading?

 

​Basics of Calls and Puts

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Learn the basics of call options and put options.

 

​What is a Strike Price?

Learn about an option’s strike price and “moneyness.”

 

​Options Expiration

options expiration

Learn about when options expire and how to choose an expiration.

 
 

​Intrinsic & Extrinsic Value

Every option has two price components: intrinsic and extrinsic value.

 
 

​Exercise & Assignment

What happens when an option is exercised?

 
 
 

​​The Bid-Ask Spread

Learn about gauging an option’s “liquidity” with the bid-ask spread.

 
 
 

​Volume & Open Interest

Learn more about option liquidity with volume and open interest.

 
 
 

​Order Types: Market, Limit, GTC, Stop-Loss

There are numerous order types you can use when trading stocks or options. Which ones are the best and which are the worst?

 
 
 

The Best Brokerage for Traders

We’ve been trading with tastyworks for years, benefiting from their trader-friendly fees:

  • Free Stock Trading
  • $10 Commission-Cap Per Option Leg
  • Close Trades for Free*
  • $10 Max Fee Per Crypto Order

Sign up with tastyworks using the link below to secure a $200 free stock signup bonus.

* Applicable exchange, clearing, and regulatory fees still apply to all opening and closing trades except for cryptocurrency orders which are not subject to exchange, clearing, and regulatory fees.

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About the Author

Chris Butler received his Bachelor’s degree in Finance from DePaul University and has nine years of experience in the financial markets. 

Chris started the projectfinance YouTube channel in 2016, which has accumulated over 25 million views from investors globally.

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