Options Trading 101: Options Explained in Plain English

An introduction to stock options trading for beginners.

With the recent stock market volatility and finally having enough money to care about my investment strategy, I’ve been interested again in stock trading.

I first learned how to trade during the crash and recession in 2008 and its recovery. In fact, I sold my “obtainable dream car” in order to get capital to invest.

I was somewhat successful, enough for the bug to bite and get me hooked. Like how most of these stories end, I lost enough for me at the time to stop completely and never look back.

I was too emotional. I didn’t make trading rules. I was shadow trading a friend. Looking back 12 years later, my mistakes are obvious.

I’ve grown a lot since then - in a sense of maturity, control of emotions thanks to Stoicism and philosophy, interest in learning, and in capital I can afford to lose.

With these new tools in mind and hand, I’ve begun to learn and experiment with trading options, which depending on how they’re used can be either very risky and lucrative or much less risky than directly trading stocks.

At first, options were intimidating and confusing to learn, but after trading both call and put options several times, I’ve become more comfortable with them.

In this latest article, I essentially turned my notes into an options trading guide for beginners. I plan to follow up with a few more of them and make it a series.

If you’re interested in learning how to trade options, I hope this introduction to them will put you on the right path and keep an eye out for the next one in the series.