Been trading for a while but mostly stuck to simple stuff. Keep hearing about stock options but honestly don’t know where to start.
I see some folks making money with options but also hear you can lose a lot quickly. What should I know before getting started?
Looking for the basic info here, not the complicated details.
Options let you buy or sell stock at a fixed price before they expire.
• Calls - make money when price rises
• Puts - make money when price drops
• Premium - upfront cost
• Strike price - your execution price
• Expiration - deadline
Paper trade first before risking real money.
Most platforms have simulators where you can practice without real money. That’s honestly the best way to learn.
Watch out for volatility too. When the market goes crazy, option prices swing way more than the stock itself. Can work for or against you.
Check if your broker has decent educational stuff. Some have step-by-step guides that actually explain things clearly.
Start with ATM calls on stocks you know well, around 30-45 DTE.
Options are a tool for trading stocks. You pay a fee to have the chance to buy or sell at a certain price before they expire. If you don’t use the option, you lose that fee. Many beginners lose money thinking they can gamble with options. It’s important to start small and understand time decay, which reduces your premium daily. Only invest what you can afford to lose because options can end up worthless.
Jumping into weekly options was my biggest mistake. I thought I could make quick cash. Lost $800 in just two weeks.
Time decay really hits hard. Options I bought on Monday became worthless by Friday, even though the stock moved in my favor.
Start with longer dated options and be prepared to learn from losses.