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."
The price you think the stock will hit (e.g., "I think NVIDIA will hit $150").
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 . how to buy stock options
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:
You’re betting the stock price will go up . A Call gives you the right to buy the stock at a set price. This is the price you pay for the contract
If the stock moves in your favor and the option's value increases, you can "Sell to Close" to pocket the profit.
AI responses may include mistakes. For financial advice, consult a professional. Learn more Because options are more complex and carry more
You’re betting the stock price will go down . A Put gives you the right to sell the stock at a set price. 3. Navigate the Option Chain