By: Melody
We are hoping this to be an easy and simple lesson to introduce options to you. By following Options Basics' articles, you should be able to understand options and how to utilize options to either profit or protect your stock.
Going into options basics, the first thing that we should be discussing is what options are.
A stock option is a contract that gives the holder the right to buy (a call) or sell (a put) on a particular stock, at a predetermined price (the strike price), on or before a particular date (the expiration date). For everyone who buys a stock, there is someone who sells it. Likewise, for every option (call or put) buyer, there is an options seller.
For example, Adobe is at $461 a share at this moment, and I think it will continue going up in the near future, what should I do?
After clicking on the Exp. Dates, there should be a drop-down list with different expiration dates for all the options.
In order to demonstrate, let's just say that I believe ADBE will go up to $500+ a share by December.
In this case, I will be looking at options that expire on or after December.
And because I think that ADBE will go up to $500+ a share, I will select Call options with a strike price of around $500.
This is what I see:
We can see that the options price is $10.72, this means in order to buy 1 contract(unit) of this call option I need to pay $10.72*100=$1072 right now.
Today, we are simply learning to check option prices.
In order to know how to properly pick which options to buy, we have to further learn to understand the options table.
Please stay with us for more on options basics!
If there is anything that you didn't understand in today's Options Basics article, simply leave a comment below and we will try to explain more to you!
For more investment knowledge and trends, welcome to Courses in the Community.
Comment(62)
can you guys explain the delta beta gamma and what they mean and whats a good range for all before we buy
Comment here for anything you would like to learn about options and we will modify our contents to best serve you!
Yes! The Greeks are already in our syllabus, thanks for the feedback! By seeing comments we will know if you guys are interested in knowing more, that way we will prioritize tasks according to what you need! We are trying to explain options in a way that will help ppl understand instead of copying off of text books. Therefore I do apologize if it takes a bit longer! But as Ive mentioned, we will prioritize this once we know that people are willing to learn!
ok
why can't I buy option with cash
why 100 units?
What about sell option? Could you please explain sell option as well? Thanks
yeah why times it by one hundred if its for 1 contract? are you saying you get to buy a 100 shares for 10.51?
a share*
no it means 100 shares at 10.51. meaning $1051. plus cost to buy that option. 1 unit equals 100 shares
2 minute audio well worth the listen and follow the written article at the same time. I will listen again
Very simple to understand, made for the beginner, thank you for this!
For this how much do I require to keep my account balance ?
You Just have to Follow the Normal Rules for Your Account with MooMoo. Options are another vehicle to grow a small account If you really study the stock from what understand.
I understood the article, however, I would like to know where I can find the syllabus. Thanks
Interesting.
For options, is there a minimum units To meet?
great start!
What is the time frame to buy a option call. Thanks
Seems Good
Nice
Nice
Hello… detla means for every 1 point increase how much increase in your premium price.
👍
let say I buy an option of $2 for a month expiry date. the stock goes up to $5 with a month can I see before the expiry date?
who are the market maker or liquidity provider for Option in moomoo platform
I am new so Thank you for the course on Options !
that was easy
im still confuse
Why is there still a bid price and sell price if you say that the strike price for $500 is $10.72?
I want to learn more of this! And thank you very much for the insights!
all stock/financial verbiage is over my head - 8 can get so lost, so easily... but I really want to comprehend this Information! I believe that investing is something WE SHOULD ALL be taught at some point in our lives... the earlier, the better ...
*I can get so lost so easily
Good to know
I don’t understand this either. So when you buy 1 share are you automatically given 100 shares (options)?
can sell option before the expiry date?
Yeah, contact customer service: clientservice@futusg.com if you want that
:)
hi, just trying to understand:
1- if i put a call at $500 and it reaches that price in Dec: i will have to buy 100 shares at $500? but my reward will be to collect $1,072 premium?
- if i know the price will go up at 500, why shouldnt i buy now at 460 and do a put at $500 and collect the premium?
how does options protect stock?
Ty for this!
Are their videos to teach beginners how to buy or sell options in moo moo?
your buying an option is a contract. 1 option is 100 shares so you multiply the cost by 100. that's why in the example the total cost is $1,051.00.
Appreciate if you could also talk about the risk in option and what to look up for? Thank u
stick learning everything I'm so glad for paper trading
So the above is for us to buy a call option@ 100 shares?
so what are the top 3 must know, striped down to the top three original in order ( ??#1 capital #2 Markets #3 analytics ( indicators, graphs, candlesticks etc ) i want this in it's simplest the basics, beginning, the reason for it's existence...That would be awesome that type of post or blog would definitely catch my interest and hold my attention..
I'm willing to learn. if abcourse your willing to spend a lil time teaching me and explain the concept and how to purchase and earnings.
if an option hits the target price before expiry date, what happens?
Nice
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