Understanding
Stock Options Trading
and Technical Analysis Basics




Welcome to the Option Basics Guide
and learn how to trade options!

Before continuing, we need to emphasize that options represent a higher-level form of investment, and carry a much higher amount of risk. As such, investors are advised to thoroughly understand and learn how to trade options before investing, and to only invest with risk capital.

Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606.

Easy-speak Stock options are more complex and risky than stocks. Carefully study and learn how to trade options before investing. Also, only invest with money that you can afford to lose.

This guide helps you learn stock options in the American stock market. The properties and rules in trading options defer from country to country. If you wish to learn stock options in a different country, the option basics from this guide still apply, but you are advised to consult your local Options Exchange for details.

This guide assumes that you already have a basic understanding of the stock market. If you need more information on that, you can read Investopedia's stock tutorial here.

The topics covered in the Option Basics Guide are as follows. You can click a title to jump directly to that topic, or click the "Next" button below to start with the first topic.


Topics in this Guide
  1.  What are options
  2.  Calls and puts
  3.  Options lingo
  4.  Option strategies
  5.  Straddles
  6.  Covered calls
  7.  Spreads


1. What are options

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