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Learn Options

Plain explanations of how stock options work, from the first contract to the strategies Options Beacon reviews. Every example states its numbers, every article lists its sources.

Start here

13 articles in reading order, about 65 minutes in all. Each one assumes only the ones before it.

  1. What is an option?

    Beginner · 4 min read

  2. Calls and puts

    Beginner · 5 min read

  3. Option buyers and sellers: rights and obligations

    Beginner · 5 min read

  4. Strike price, expiration date and premium

    Beginner · 5 min read

  5. One option contract is 100 shares

    Beginner · 4 min read

  6. How to read a payoff diagram

    Beginner · 4 min read

  7. Moneyness, intrinsic value and time value

    Beginner · 4 min read

  8. How to read an option chain

    Beginner · 5 min read

  9. Exercise, assignment and expiration day

    Beginner · 6 min read

  10. The main risks of options

    Beginner · 5 min read

  11. Cash-secured put

    Beginner · 6 min read

  12. Covered call

    Beginner · 5 min read

  13. The wheel strategy

    Intermediate · 7 min read

The whole path, in order

Browse by topic

Option basics

What an option is, who holds which right and which obligation, how a contract is quoted, read and settled, and what can go wrong.

10 articles, beginner

Glossary

70 terms, one definition each. Every article links to the terms it uses.

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Browse every term

Recently reviewed

What the levels mean

Beginner
new to options
Intermediate
has placed a few trades
Advanced
manages positions with several legs