Options: Understand the Contract. Know the Risk.

INSIDE THE GUIDE

1. 01What is an option?
2. 02Meet the four contract terms.
3. 03A call gives the right to buy.
4. 04A put gives the right to sell.
5. 05Buyer rights. Seller obligations.
6. 06One contract can mean 100 shares.
7. 07Premium paid is cash spent.
8. 08What is inside the premium?
9. 09In the money does not mean profitable.
10. 10Payoff and profit are different curves.
11. 11Break-even belongs to an assumption.
12. 12Follow one contract from start to finish.
13. 13Direction is only one price input.
14. 14Time can work against the buyer.
15. 15Implied volatility is priced uncertainty.
16. 16Good news can still produce a loss.
17. 17Delta changes. Gamma explains the change.
18. 18Theta and vega put names to risk.
19. 19Read the option chain one row at a time.
20. 20The spread is a real cost.
21. 21Volume is activity. Open interest is outstanding.
22. 22Open and close are different instructions.
23. 23Small charges can matter a lot.
24. 24Closing is not exercising.
25. 25Exercise style is not geography.
26. 26Shares or cash: know what settles.
27. 27Early assignment can arrive before your plan.
28. 28Expiration is a process, not a magic reset.
29. 29The closing bell does not end every risk.
30. 30After exercise, inspect what you own or owe.
31. 31A long call: limited option loss, real risk.
32. 32A long put is not short stock.
33. 33A protective put has a price and an end.
34. 34A covered call still owns stock downside.
35. 35A cash-secured put can buy a falling stock.
36. 36Spreads combine obligations and rights.
37. 37An uncovered call can lose without a ceiling.
38. 38An unsecured put can exceed your available cash.
39. 390DTE compresses the decision window.
40. 40Small bets can become a large loss.
41. 41Rolling does not erase a loss.
42. 42Two legs can stop behaving like one position.
43. 43Buying power is permission, not protection.
44. 44Read the product, not just the ticker.
45. 45Taxes need their own record.
46. 46Ask six questions before any order.
47. 47Plan for events before they arrive.
48. 48An account balance needs interpretation.

Includes original diagrams, complete cases, knowledge checks, a glossary and linked sources.