Skip to main
Tee 💵 "Mr_Kryptozzz"
so @ctsshah mentioned to me people might be interested to know a couple different ways to trade #options in the market as i recently posted about my #earningsplay strategy called a straddle... now this strategy can sound complicated if you're not familiar with how to trade options, but truth be told its super easy once you learn the let me start at the top and explain what options are and how to trade them effectively... OPTIONS FOR BEGINNERS options can be used as a strategic way to buy 100 shares of a stock you want to own for a cheaper price or as a means of income trading. they come in calls(long) or puts(short), and you can buy or sell either one. options are just a contract that gives you the RIGHT to buy or sell a stock or other underlying security (but NOT the obligation) — usually in bundles of 100 — at a pre-negotiated price by a certain date. however, when that date arrives, you’re not obligated to buy or sell the stock. you have the OPTION to let the contract expire, hence the name. when buying options, you’ll pay what’s known as a “premium” up front, which you’ll lose if you let the contract expire, unless you already own 100 shares of the stock and sell an option contract in which case you'll collect a premium. now remember, each contract represents 100 shares, so the price you see on the premium quoted or credit given (depending on if you're buying or selling calls/puts) will be multiplied by 100 when you buy/sell your desired contract (dont forget this).... so, say you think stock ABC is going to go up soon and you're almost certain of it. you'd want to buy a call option (going Long) on ABC at or BELOW the strike price (strike price is what you'll pay per share if you exercise your contract) with potentially unlimited upside while limiting your risk to only the premium you paid as potential loss. now say you own the 100 shares already, you can sell covered calls/puts to mitigate and limit risk, with less potential upside gains (will have to explain in another thread). the opposite is true of you think the stock might tank... you'll want to buy a put option (shorting) or sell a covered call if you own the 100 shares and collect the premium upfront. a put option gives you the right to sell a company’s stock at an agreed upon strike price before its expiration. (more later)... once you buy the contract, a few things can happen from the time you purchase it to the time of expiration. you can either exercise the option, meaning you’ll buy or sell shares of the stock at the strike price, you could sell the contract to another investor (most likely your #1 choice /goal), OR you could let the contract expire and walk away with no further financial obligation. now i know this sounds confusing as hell so let me give you some basic examples of both a call and put option contract, assuming you DONT own 100 shares yet... let’s say a company’s stock is currently $50 per share. You could buy a call option to buy the stock at $50/share (the strike price) that expires in six months, for a premium of $5. Premiums are assessed per-share, so this call option would cost $500 ($5 premium X 100 shares). Note that when buying options, you’ll choose from an available list of strike prices, and it doesn’t have to be the same as the current stock price. If the stock price remains at or drops below $50 during the six-month period and never recovers, you could let the contract expire worthless, and your total loss would be the $500 you spent on the premium. That $500 is also the maximum amount you could lose on the investment. Now let’s say the price rises to $60. You could exercise your option to buy the 100 shares at the strike price of $50, then turn around and sell them at $60. In this instance, your return on investment would be $500. (It would cost $5,000 to buy the shares, but you would sell them for $6,000 for a gain of $1,000. Subtract the cost of the premium, and you’re left with $500 profit.) When buying a call option, there will be a breakeven point at which you’ll earn a profit (strike price + premium paid) In this example, that breakeven point is $55 ($50 strike+$5 premium). So, if the stock is trading between $50 and $55, you would be able to recoup some of your investment, but it would still be for a loss (stock needs to rise ABOVE your strike price for call options)... If the stock price does rise above the strike price, the contract itself gains intrinsic value, and the price of the premium will rise accordingly. This means you could sell the contract to another investor before expiration for more than you bought it for, taking a profit (#1 way traders use options). You’ll have to look at several factors to determine whether you should sell an options contract or exercise it, but most traders set a profit percentage goal and sell when they hit it... WHEEEEWWW that was long... hope you're not too confused but that's the beginners guide for options trading by meeeeeee with a little help from nerd wallet to explain lingo... heres the article if you want more info... theres so much more to options trading to know before you jump in head first, and if enough people want more info i can go into the strategies i use daily to turn major profits or even to hedge against a downturn or market crash.... THANKS FOR READING 😎
Own your future.
Build your portfolio.

All of your investing.
All in one place.

Invest in stocks, treasuries, ETFs, crypto, and alternative assets on Public. Transfer your account to Public and get up to $10,000.
Sign Up
Contact Us
Check the background of this firm on FINRA’s BrokerCheck.

© Copyright 2023 Public Holdings, Inc. All Rights Reserved.

Market data powered by Xignite.

Stocks and ETFs.
Brokerage services for US-listed, registered securities are offered to self-directed customers by Open to the Public Investing, Inc. (“Open to the Public Investing”), a registered broker-dealer and member of FINRA & SIPC. Additional information about your broker can be found by clicking here. Open to Public Investing is a wholly-owned subsidiary of Public Holdings, Inc. (“Public Holdings”). This is not an offer, solicitation of an offer, or advice to buy or sell securities or open a brokerage account in any jurisdiction where Open to the Public Investing is not registered. Securities products offered by Open to the Public Investing are not FDIC insured. Apex Clearing Corporation, our clearing firm, has additional insurance coverage in excess of the regular SIPC limits. Additional information can be found here.

Alternative Assets.
Brokerage services for alternative assets available on Public are offered by Dalmore Group, LLC (“Dalmore”), member of FINRA & SIPC. “Alternative assets,” as the term is used at Public, are equity securities that have been issued pursuant to Regulation A of the Securities Act of 1933 (as amended) (“Regulation A”). This content is not investment advice. These investments are speculative, involve substantial risks (including illiquidity and loss of principal), and are not FDIC or SIPC insured. Alternative Assets purchased on the Public platform are not held in an Open to the Public Investing brokerage account and are self-custodied by the purchaser. The issuers of these securities may be an affiliate of Public, and Public (or an affiliate) may earn fees when you purchase or sell Alternative Assets. For more information on risks and conflicts of interest, see these disclosures.
An affiliate of Public may be “testing the waters” and considering making an offering of securities under Tier 2 of Regulation A. No money or other consideration is being solicited and, if sent in response, will not be accepted. No offer to buy securities can be accepted, and no part of the purchase price can be received, until an offering statement filed with the SEC has been qualified by the SEC. Any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of acceptance given after the date of qualification by the SEC or as stated in the offering materials relating to an investment opportunity, as applicable. An indication of interest to purchase securities involves no obligation or commitment of any kind.

Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Apex Crypto is not a registered broker-dealer or a member of SIPC or FINRA. Cryptocurrencies are not securities and are not FDIC or SIPC insured. Apex Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Please ensure that you fully understand the risks involved before trading: Legal Disclosures, Apex Crypto.

U.S. Treasuries (“T-Bill“) investing services on the Public Platform are offered by Jiko Securities, Inc. (“JSI”), a registered broker-dealer and member of FINRA & SIPC. See JSI’s FINRA BrokerCheck and Form CRS for further information. When you enable T-Bill investing on the Public platform, you open a separate brokerage account with JSI (the “Treasury Account“).

JSI uses funds from your Treasury Account to purchase T-bills in increments of $100 “par value” (the T-bill’s value at maturity). T-bills are purchased at a discount to the par value and the T-bill’s yield represents the difference in price between the “par value” and the “discount price.” Aggregate funds in your Treasury Account in excess of the T-bill purchases will remain in your Treasury Account as cash. The value of T-bills fluctuate and investors may receive more or less than their original investments if sold prior to maturity. T-bills are subject to price change and availability - yield is subject to change. Past performance is not indicative of future performance. Investments in T-bills involve a variety of risks, including credit risk, interest rate risk, and liquidity risk. As a general rule, the price of a T-bills moves inversely to changes in interest rates. See Jiko U.S. Treasuries Risk Disclosures for further details.

Investments in T-bills: Not FDIC Insured; No Bank Guarantee; May Lose Value.Banking services and bank accounts are offered by Jiko Bank, a division of Mid-Central National Bank, Member FDIC. Such banking services and accounts are subject to transaction dollar amount and/or frequency limitations set forth in the Jiko Bank Account Limitations Disclosures.

JSI and Jiko Bank are not affiliated with Public Holdings, Inc. (“Public”) or any of its subsidiaries. None of these entities provide legal, tax, or accounting advice. You should consult your legal, tax, or financial advisors before making any financial decisions. This material is not intended as a recommendation, offer, or solicitation to purchase or sell securities, open a brokerage account, or engage in any investment strategy.

Commission-free trading of stocks and ETFs refers to $0 commissions for Open to the Public Investing self-directed individual cash brokerage accounts that trade the U.S.-listed, registered securities electronically during the Regular Trading Hours. Keep in mind that other fees such as regulatory fees, Premium subscription fees, commissions on trades during extended trading hours, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Open to the Public Investing’s Fee Schedule to learn more.

Fractional shares are illiquid outside of Public and not transferable. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see our Fractional Share Disclosure to learn more.

All investments involve the risk of loss and the past performance of a security or a financial product does not guarantee future results or returns.