Options Basics, the Greeks & Getting Started

Level: Intermediate · About 15 min · 7 slides

An option is a contract that gives you the right, but not the obligation, to buy (call) or sell (put) 100 shares at a set price by a set date. Options add leverage, which works both ways. Learn the terms, four basic strategies, the Greeks, and Coach's path: shares first, then demo options.

🔑 Key takeaways

• Call = right to buy; put = right to sell. One contract usually = 100 shares.
• Buying an option risks the premium paid. Selling naked calls has unlimited risk.
• Theta (time decay) speeds up near expiration, which hurts cheap OTM weeklies.
• Start with liquid underlyings (e.g., SPY, AAPL) and 30–60 day contracts.
• Coach's path: shares for 3 months, then demo options for 1 month.

✅ Your homework

1. Price an AAPL call on optionsprofitcalculator.com and read its break-even.
2. Find delta, theta and IV for one option on your broker's chain.
3. Paper trade one long call and one long put, with an exit plan written down first.
4. Start 'Options as a Strategic Investment' (McMillan).

📎 Resources

• Options Profit Calculator: optionsprofitcalculator.com
• OptionStrat (backtest/visualize spreads)
• Cboe options education
• Book: Options as a Strategic Investment (Lawrence McMillan)
• OCC / Cboe: Characteristics and Risks of Standardized Options
• ADT Academy: https://americandreamtradingacademy.com