How to start?

Jul 9 18:23

Step 1 Click【Put】to find all the put options 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 put 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 decline to the expected level. But if the remaining time is too long, the put tends to be more expensive and less liquid. So remember to 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. Put options can be divided into three groups, ITM, ATM, and OTM, based on their strikes relative to the underlying stock price. All else being equal, they show the following characteristics, and you could choose a strike price that suits your strategy.

Apart from the underlying stock price, the strike price, and the expiration date that we've mentioned, 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 put 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