Welcome to our free online stock option education center. Our goal is to educate you about the basics of option trading strategies with a basic Stock Option Tutorial.

Why Trade Stock Options? Stock options are exchanged for two main reasons: for speculation (adds risk) and for hedging (reduces risk).

  • Speculation - Stock options are a way of leveraging your money. You are able to participate in any upward moves of a stock without having to put up all the money to buy the stock. However, if the stock does not go up in price, the call option buyer may lose 100% of his/her investment. For this reason, options are considered to be risky investments.
  • Hedging - Stock options can be used to considerably reduce risk. Put options are usually traded for hedging purposes. While hedging reduces risk, it also limits the amounts of gains you can make. Since most stock markets go up over time, and most people invest in stock because they hope prices will rise, there is more interest and activity in call options than there is in put options.

Within this site you will find a discussion of what stock options are, how they are traded, and how you can use them to improve your portfolio. Please feel free to contact us with any questions.

There are three general classes of option spreads:
Bullish - Betting the stock goes up.
Bearish - Betting the stock goes down.
Neutral - Betting on stock volatility (or lack thereof).

Long Calls
Naked Calls
Calendar Spread
Naked Puts
Long Puts
Straddle Spread
Bull Call Spread
Bear Call Spread
Strangle Spread
Bull Put Spread
Bear Put Spread
Butterfly Spread

Condor Spread