To The Moon

Options trading may seem complicated at first, but it's easy to understand if you know some key points.

What is an option?

An option refers to a contract that gives the holder the right to buy (or sell) the underlying asset at a specific price on or before a certain date.People trade options for income, to speculate and hedge risk. Options are known as derivatives because they derive their value from an underlying asset.

Key Options Concepts

• Call: An options contract that gives you the right to buy stock at a set price within a certain time period.
• Put: An options contract that gives you the right to sell stock at a set price within a certain time period.
• Expiration Date:An expiration date in derivatives is the last day that derivative contracts, such as options or futures, are valid. On or before this day, investors will have already decided what to do with their expiring position.
• Strike Price, or exercise price: The price at which you can buy or sell the stock if you choose to exercise the option.
• In The Money: In the money is an expression that refers to an option that possesses intrinsic value. An in-the-money call option means the option holder has the opportunity to buy the security below its current market price;An in-the-money put option means the option holder can sell the security above its current market price
• Out Of The Money: Out of the money is an expression used to describe an option contract that only contains extrinsic value.
• At The Money: At the money is a situation where an option's strike price is identical to the current market price of the underlying security.

How to trade options in Tiger?

Trading options in Tiger is simple, taking NIO options as an example:

• Step1: Search for [TSLA]& Enter the TSLA stock details page
• Step2: Click the "Options" & select any option contract(Call or Put) to trade
• Step3: Click Buy or Sell button

3 Factors That Determine An Option’s Price

The Current Price of the Stock & Strike Price: The value of calls and puts are affected by changing in the current price of the stock. When the stock price goes up, the probability or chance of a profitable increase. Put options, however, work oppositely.

Period Before Expiry: Options have a defined lifespan and tend to expire on or after a certain date,that means the more the time until expiration, the greater the probability or chance of a profitable move

Volatility: Volatility measures the difference from day to day in a stock's price. It is also referred to as swings that affect a stock’s prices. The more volatile stocks are more frequently subject to a varying strike price level as compared to their non-volatile counterparts.

📚Recommend to read

• What is an Option? Ask me!
• How to Calculate the Gain & Loss of Options
• What is a Covered Call？Option Strategy Series 1
• What are Out of the Money Options & In the Money Options?
• What is Delta in Options?
• Option Indicator IV (Implied Volatility)
• What is Gamma in Options?
• What is Theta in Options?
• What is Vega & Rho in options?
• Options: VIX & SPX

📺Recommend to watch

• Tiger Options Tour For Beginners
• How to make extra profits by selling covered call
• What is an Option?——learn about Call and put
• Video: Tiger Options Tour For Beginners to learn
• Component of options Contracts——how to read an option？
• Valuation of Options—How are options priced？
• Options Trading and Settlement—what should we know before trading options？

✅ Tigers' option strategy

• Demystifying Options Part 1
• Demystifying Options Part 2
• Demystifying Options Part 3
• Demystifying Options Part 4
• Demystifying Options Part 5
• Demystifying Options Part 6
• Demystifying Options Part 7
• Demystifying Options Part 8
• Demystifying Options Part 9
• Demystifying Options Part 10
• Why do we follow Warren Buffett's investment strategy?
• Options and Dividends: Understanding Early Exercise and Ex-D
• How Warren Buffett Uses Options

❤️Special features of the option

• 【Option Price Forecast】Description
• 【Call/Put Ratio】Description
• 【Unusual Options】Description
• 【Options List】Description
• Pick Your Option Strategies with the Option Screener

Finally, if you have any questions, please leave a message in the comment section.

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