O'Reilly logo

Options made simple: A beginner's guide to trading options for success by Jacqueline Clarke

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 6: Buying options: the scenarios

In this chapter we will look at the different scenarios that are possible when buying either a put option or a call option.

At the end of this chapter you should have a good understanding of how changes in price of the underlying stock will affect the value of your option and what alternative courses of action you can take based on this price movement.

Buying options

When buying options you are speculating that the market price of the underlying stock will move in your direction by a large enough amount to generate a profit on your option. If you are right, your percentage returns are significant. However, if you are wrong, you can potentially lose the entire premium you paid for the option.

The actions ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required