Basics
goal of the course - to remove the mystery and complexity surrounding options trading.
Basic Options:
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Call Option: Gives you the right, but not the obligation, to buy a specific amount of an underlying asset (STOCKS, INDEX) at a predetermined price (strike price) by a certain date (expiration date).
Put Option: Gives you the right, but not the obligation, to sell a specific amount of an underlying asset at a predetermined price (strike price) by a certain date (expiration date).
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In the Money (ITM): When the underlying asset's price is favorable for your option type. For a call option, ITM means the current price is higher than the strike price. For a put option, ITM means the current price is lower than the strike price.
At the Money (ATM): When the underlying asset's price is exactly equal to the strike price.
Out of the Money (OTM): When the underlying asset's price is unfavorable for your option type. For a call option, OTM means the current price is lower than the strike price. For a put option, OTM means the current price is higher than the strike price.
Terminology