This is where you'll find the basics. What's a call? What's a put? Whether it's a call or a put, your option contract will have specific strike price. Also -- and this is one of the big differences between stock ownership and options trading -- your option will expire on a specified date. Options trading comes with its own lingo, which sometimes scares off beginners. This is the section where you'll learn how to translate that lingo. You'll learn intrinsic value and time decay, and what it means to be in the money, out of the money and at the money. Read this section first before moving on to more advanced topics. Learn More...

Getting Started With Options

Options trading isn't just about speculation -- although it can be. For example, even many beginners are familiar with the concept of a covered call. You sell a call contract on a stock you already own at a price above where the stock is trading. If the stock reaches the exercise price, you sell the stock, keeping the gain and the premium you collected at the outset of the trade. If the stock doesn't rise to the exercise price, you still keep the premium. Win-win. Read here about the many uses of options, from generating income, to hedging a portfolio, to pure speculation. Learn More...

Getting Started With Options

Ready to try trading options? Let Senior Equities Analyst Andrea Kramer walk you through the basics. Andrea has written hundreds of articles on options trading; she has also hosted webinars and given presentations at prestigious trade shows. She'll handle you beginners gently. Rookies will find plenty to chew on here, from simple call and put buying and selling, to pairs trading and some basic spreads. This section also includes some articles to further your options education; Andrea discusses topics such as rolling your options, time decay, and Long-term Equity AnticiPation Securities. Learn More...


Andrea Kramer is back as your teacher in this section, which is for traders with a little experience. Some of these strategies have exotic names -- condors and butterflies, guts and strangles -- but Andrea will bring it all back to earth in plain, easy-to-understand language. And once again, Andrea discusses some more advanced educational topics, including the Greeks and implied volatility. Learn More...

Getting Started With Options

Senior Equities Analyst Elizabeth Harrow writes for SchaeffersResearch.com, SFO magazine, and AOL's BloggingStocks, among other outlets, and has written and presented webinars on both beginning and advanced option topics. In this section, Elizabeth digs in to some meatier topics, such as indexes and exchange-traded funds, how to set stop-losses, how to enter and exit a trade, and more. Beginner or veteran, you'll find plenty of valuable ideas here. Learn More...

Getting Started With Options

What sets Schaeffer's apart from the crowd? It's Expectational Analysis«, our three-tiered methodology for analyzing stocks, stock sectors, or the market as a whole. It combines fundamental analysis, technical analysis, and sentiment analysis, a clear-eyed, quantitative dissection and study of the beliefs and convictions of the market. Our view of sentiment analysis is stongly colored by our contrarian philosophy. In this section, you'll learn how to use technical analysis. and which indicators we like to use. We'll also tell you how we quantify sentiment, using open interest configurations, mutual fund flows, media coverage, and other indicators. Learn More...

Getting Started With Options

Questions & Answers

We've got answers. Our team of experts stand ready to answer any questions you have regarding options trading. Each trading day we will select one question to answer from all those submitted. These questions have been archived below for your ongoing perusal. Hopefully, this will quickly become an extensive library of educational material. In order for this to be such a resource, we ask but one thing — we need your questions. They can be as simple or as complex as you like, and we will try to answer a fair sampling on both ends of that spectrum.

Options Trading Glossary

Schaeffer's Education Image Can't decide whether you should be bullish or bearish? Have yet to understand the concept behind the straddle? This glossary will give you the terms you need to get by in the world of options trading. The glossary has been divided into sections to make it easier for you to navigate. Click below to get started.

A | B | C | D | E | F
G | H | I | K | L | M
N | O | P | Q | R | S
T | U | V | W


Books and Home Study Courses
on Investing Basics
The Art of Contrary Thinking
Bernie Schaeffer proclaims, “This book profoundly changed the way I approach investing.” Avoid thinking like the crowd – and profit from your independence.
Home Study Program
Build a solid foundation for successful option trading - in just 10 days! Bernie Schaeffer’s home study program will quickly transform you into a confident options trader.
The Option Advisor Book
Move from investor to option trader with Bernie Schaeffer’s classic book, “The Option Advisor: Wealth-building Techniques Using Equity and Index Options.”



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