How To Buy — Options

Buying options allows you to speculate on a stock's price movement with less capital than buying the shares outright, but it comes with a high risk of losing your entire investment if the stock doesn't move in your favor before the contract expires.

: The price you pay. Remember, one contract represents 100 shares , so a quoted price of $2.00 actually costs $200 . How to Trade Options: A Beginner's Guide - Tastytrade how to buy options

: The deadline for the contract. Options lose value every day as they approach expiration (time decay). Buying options allows you to speculate on a

: Buy a Call . This gives you the right to buy 100 shares at a set price (the strike price ). How to Trade Options: A Beginner's Guide -

: Select a broker that supports options, such as Fidelity , Tastytrade , or Charles Schwab .

: Transfer cash to cover the premium (the cost of the contract) and any potential brokerage fees. 2. Choose Your Strategy Decide on your outlook for a specific stock: