: The fixed price at which the option allows you to buy or sell the stock.
: You buy these if you expect the stock price to rise . They grant the right to buy the stock.
: The date the contract becomes void. If the stock hasn't moved as expected by this date, the option may expire worthless, and you lose the premium paid. 2. Preparing to Trade how to buy options in stock market
: You buy these if you expect the stock price to fall . They grant the right to sell the stock.
: This is the price you pay to purchase the option. It is quoted per share, so a $2.00 premium actually costs $200 per contract (100 shares x $2.00). : The fixed price at which the option
: Most brokers assign levels based on your experience. Beginners typically start at Level 2 , which allows for basic buying of calls and puts.
Unlike stocks, trading options requires a specific approval process from your broker due to the higher risks involved. : The date the contract becomes void
: Look for platforms with low per-contract fees and robust educational tools. Common choices include Interactive Brokers and Questrade .