Introduction to Options: The Basics (The Best Option Strategies)

Introduction to Options: The Basics is a very basic introduction to options, allowing the reader to get a feel for whether options trading is for him/her. The purpose of this booklet is to provide the most basic introduction, and everything is presented at the introductory level. In other words, this is a taste of how to use options.

Author’s Note:

Learning to trade options is a very personal undertaking. Over the years poor publicity has convinced some people that options are inherently risky instruments. It is not true. The major risk with options occurs when they are used by unprepared, overconfident traders. Those with an appropriate mindset –“options may prove useful, but first I must determine how well I can understand how they work”—have the best chance of finding success.

This eBook is offered to give you a taste of the world of stock options. There’s enough information to help you decide whether you want to learn more. If the answer is “yes” then use the links to additional information. The language of options is introduced. Words that may be unfamiliar are kept to a minimum. The first time these words appear, they are underlined in bold font. There is a Glossary at the back of the book. Additional option terminology is available in an expanded glossary.

Your study of this subject can be as simple or complex as you desire. If your goal is to learn enough to own positions that enhance your income potential – with reduce risk, then you can achieve that goal by understanding how to write covered calls or sell cash-secured puts. Lessons on how to adopt those strategies are beyond the scope of this short introduction to options, but the information is available in any good introductory options book.