Lesson 2 of 3 · 6 min read
Options — the basics (and dangers)
A powerful tool that often costs beginners money. Understand it first.
Call and put
A call gives you the right to buy at a fixed price; a put the right to sell. You pay a premium for that right. Options expire on a date.
You only profit once the price clears the strike plus the premium you paid. Below the strike you lose only the premium.
Leverage cuts both ways
With little money you control a large position — profits can be enormous, but you can also lose 100% of your premium. Options are a time bomb: time often works against the buyer.
Not for beginners
Most retail option buyers lose money. Never start with options before you truly master the basics of stocks. See it as an advanced tool, not a lottery.
Remember this
- A call = the right to buy, a put = the right to sell; you pay a premium.
- Leverage cuts both ways: you can lose 100% of your premium.
- Time often works against the option buyer.
- Most retail option buyers lose money — not for beginners.
There is a quiz for this lesson
2 questions that check whether it stuck. They live in the app, because a quiz nobody grades teaches nothing.
Want to practise, not just read?
Stockedin teaches investing in short lessons, with €10,000 in demo money to make your mistakes with. Stocky, the AI coach, explains anything you get stuck on.