How to start?

Jul 9 18:23

Step 1 Click the 【call】to find all the calls of the stock.

Step 2 Select a strike price and an expiration date.

An expiration date refers to the last day a holder can exercise the right to buy or sell the underlying asset. The time value of a call generally decreases as its expiration date approaches. If the time left till expiration is too short, it might be more difficult for the underlying stock to rise to the expected level. But if the remaining time is too long, the call tends to be more expensive and less liquid. So you'd better choose an expiration date that fits your strategy.

The strike price refers to the price at which a holder of the option can buy or sell the asset. Call options fall into three categories, ITM, ATM, and OTM, based on their strikes relative to the underlying stock price. Under the same conditions, they show the following characteristics, and you could choose a strike price that fits your strategy.

Apart from the underlying stock price, the strike price, and the expiration date, other factors, including implied volatility, risk-free rate, and dividend yield, may also affect the price of an option. 

Step 3 Set your buy order for a call option.

Tips: The quoted premium of an option pertains to only one share of the underlying stock in the US market. But each option controls 100 shares of stock. Therefore, if you want to buy an option with a price tag of $1, you actually need to pay $100 to get it.

This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more