Brokers assign "levels" (usually 1–4). Level 1 might only let you write covered calls, while higher levels allow for more complex (and risky) strategies. 2. Learn the Two Main Flavors There are only two types of options you need to know:
Once approved, you’ll look at an "Option Chain"—a digital menu of available contracts. You need to pick three things: how to buy stock options
This is the price you pay for the contract. Note: One option contract usually controls 100 shares . If the premium is listed as $2.00, the contract will actually cost you $200. 4. Place Your Order When you’re ready, you’ll select "Buy to Open." Brokers assign "levels" (usually 1–4)
You can't just buy options the same way you buy shares of Apple or Tesla. Because options are more complex and carry more risk, brokers require you to apply for . Learn the Two Main Flavors There are only
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If you have the cash, you can use the option to actually buy (or sell) the 100 shares at the strike price.
If your bet was wrong, the option might become worthless. In this case, you simply lose the money you paid for the premium.