Understanding
Stock Options Trading
and Technical Analysis Basics

Welcome to the Options 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.

The Options Basics Guide helps you learn stock options in the American stock market. While the strategies and techniques discussed here are applicable everywhere, the rules in trading options defer from country to country. If you wish to learn how to trade 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 country-specific 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 basic stock tutorial.

If you are looking for specific option strategies such as the Covered Call, Iron Condor or Straddle, please visit our list of Advanced Options Strategies featuring graphical examples and explanations for each strategy.

The topics covered in the Options 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.


What Are Options?

Topics in this Guide

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