Getting Started With Stock Options

Stock options trading can be an exciting and profitable part of your investment portfolio. Before you start trading options, however, there are a few principles and characteristics of stock options that you will want to understand.

What you need to know:
To help you get started, we have broken the essentials of options trading into a step-by-step, five lesson series which should prove beneficial to both beginning and experienced options traders.

1. Defining stock options
2. Distinguishing between the two types of stock option contracts
3. Exercising stock options
4. Realizing that stock options expire
5. Understanding strike prices

Basic Option Trading Strategies:
The two most basic stock option trading strategies are buying calls and buying puts.  Before progressing to any of the more complex options trading strategies, we recommend that you first have a good handle on these two.

• Buying Calls
• Buying Puts

Additional Reading:
Some other items that may be of interest to you...

• Differentiating between in-, at-, and out-of-the-money stock options
• Intrinsic value and time value in stock options
• Converting a Coca-Cola April 75 call into option symbol KODO
• How stocks and stock options differ
• The three styles of exercise features
• 8 myths about stock options
• A brief history of stock options