Free guide · No experience needed
Learn options trading for free
Calls, puts, the Greeks and contract math explained with pictures, sliders and short videos. Read it top to bottom in about 20 minutes.
What is an option?
An option is a ticket that lets you buy or sell a stock later at a price you lock in today.
Call option · AAPL
Right to buy 100 shares
- Strike
- $200
- Expiry
- 30d
- Premium
- $4
Think of a concert ticket bought months early. You pay a small fee now, and on the day you can use it — or not. If the show becomes sold out and tickets cost double, your ticket is suddenly valuable. If you can't go, you only lose what you paid.
Options work the same way. Every contract has three numbers: the strike (the locked price), the expiry (the last day) and the premium (the fee). One contract controls 100 shares, so a $4 premium costs $400.
Calls: when you think a price will rise
A call gives you the right to buy at the strike. It gains value when the stock climbs above it.
Drag the slider. Below $100 the call expires worthless and you lose the $500 premium — never more. Above $105 (strike + premium) you start making money, and there is no upper limit.
That bent line is called a payoff diagram. Every options strategy has one, and learning to read them is half of options trading.
Puts: when you think a price will fall
A put gives you the right to sell at the strike. It gains value when the stock drops below it.
Puts work like home insurance. You pay a premium each period; if nothing bad happens, the premium is gone. If the house (your stock) is damaged, the policy pays out. Many investors buy puts to protect shares they already own.
Here the breakeven is $95 (strike − premium). The most a put can earn is if the stock falls to zero.
Reading an options chain
The options chain is the menu of every available contract. Tap a column to see what it means.
| $95 | $7.10 | $7.30 | 1,840 | 28% |
| $100 | $4.00 | $4.15 | 5,210 | 26% |
| $105 | $1.90 | $2.00 | 3,022 | 25% |
Strike: The price you get to buy (call) or sell (put) at.
The highlighted row is at the money — the strike nearest the stock price. Watch the gap between bid and ask: a narrow gap means you lose less just getting in and out.
Contract math
Four small formulas tell you everything about a simple option trade before you place it.
Cost
Premium × 100
$3 → $300
Call breakeven
Strike + premium
$100 + $3 = $103
Put breakeven
Strike − premium
$100 − $3 = $97
Max loss (bought)
The premium paid
$300, never more
Try your own numbers:
The Greeks, explained simply
The Greeks are five dials that show what moves an option's price: the stock, time, volatility and rates.
Delta
Speedometer
How much the option moves when the stock moves $1. Delta 0.55 ≈ +$55 per contract.
Gamma
Accelerator
How fast delta itself changes. High near the strike and close to expiry.
Theta
Melting ice cube
Value lost every day just from time passing. It speeds up near expiry.
Vega
Weather forecast
How much the price changes when expected volatility changes by 1 point.
Rho
Interest rates
Sensitivity to interest rates. Usually the smallest Greek for short-term trades.
Theta is the one beginners feel first: an option is like an ice cube that melts a little every day. That is why buying options with very little time left is risky — the stock must move fast.
Your first practice trade
Use a simulated account first. These five steps build the habit that matters most: knowing your risk before you click.
- 1Open a paper-trading account so no real money is at risk.
- 2Pick a stock you know and open its options chain.
- 3Choose a call or put about 30–45 days out, near the current price.
- 4Write down cost, breakeven and max loss before you click buy.
- 5Track it daily and note how price, time and volatility changed it.
Glossary & questions
Every term in this guide, in one sentence.
- Option
- A contract giving the right, not the duty, to buy or sell 100 shares at a set price before a date.
- Call
- The right to buy. Gains when the price rises.
- Put
- The right to sell. Gains when the price falls.
- Strike
- The fixed price written in the contract.
- Premium
- The price of the option, quoted per share.
- Expiry
- The last day the contract is valid.
- In the money
- A call with stock above strike, or a put with stock below strike.
- Out of the money
- The opposite: the option has no value if it expired today.
- At the money
- Strike is about equal to the stock price.
- Intrinsic value
- What the option would be worth if exercised now.
- Time value
- The part of the premium paid for time remaining.
- Implied volatility
- The size of move priced into the option.
- Bid / Ask
- Best price to sell / best price to buy.
- Exercise
- Using your right to buy or sell the shares.
- Assignment
- When a seller is required to fulfil the contract.
Can I learn options trading for free?
Yes. This guide covers the essentials, and a free Trade Feeld Seekers account adds the trading course, guides and community. Practise with a paper (simulated) account before using real money.
How much money do I need to start options?
One contract costs the premium × 100. A $1.50 option costs $150. Many brokers offer paper trading with no money at all.
What is the safest option strategy for beginners?
Buying a call or put limits your loss to the premium paid. Covered calls and cash-secured puts are also commonly learned early. No strategy is risk-free.
What are the Greeks in options?
Delta, Gamma, Theta, Vega and Rho measure how an option's price reacts to stock moves, time, volatility and interest rates.
Why did my option lose money when the stock went up?
The move may have been too small to pass breakeven, time decay (Theta) ate value, or volatility dropped (Vega).
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Start free as a SeekerEducational content only, not financial advice. Options involve risk and can lose their full value.