(A market order will allow you to purchase immediately, however the price you purchase at is up to the market to decide, meaning you could get an unfavorable price if the market moves quickly or if there is low liquidity) Brokers will usually fill this price in automatically based on the best price available, however some will allow for "market orders", which are not recommended for options. This will ensure that your order only executes if you get that price or better. Enter a limit price for the option if it is not already provided.Strikes that are further above the stock price can give bigger rewards, but they come with more risk since there is less of a chance that they will be ITM. Find the call you want to buy by selecting an expiration date and then a strike price.Some brokers will require that you are approved before you can trade options. The option chain is usually a list of both calls and puts at various expiration dates and strike prices. Navigate to the stock you want to trade and open the option chain.Open your trading app or brokerage account (the service you use to trade, such as Robinhood, TD, Schwab, WeBull, etc.).To get started, type in a stock, index, or ETF in the above text box. OptionStrat's options profit calculator tool can help you quickly find the breakeven points and understand how the profit and loss of your position will change throughout the life of the option, depending on what the stock does. If you are holding the option until expiration, you need for the option to be ITM by at least the amount you paid for it. If you paid $5 per contract and the option is ITM by $2, you would lose $3. You must also factor in the price you paid for the option. However, this doesn't mean that any in-the-money option returns a profit. Options that are out of the money will expire worthless, while options in the money will be worth some amount at expiration. Out-of-the-money (OTM): The stock price is less than the strike price.At-The-Money (ATM): The stock price is equal to the strike price.In-The-Money (ITM): The stock price is greater than the strike price.It is helpful to know some basic terminology about the strike of a call option: The owner of a call option has the right, but not the obligation, to buy 100 shares of the underlying stock at the strike price in the future. A Profit Loss Stock Price Bullish Unlimited Profit Limited LossĪ call option is one of the two basic types of options.
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