New to Options

Discussion in 'Options' started by Chance360, Jan 22, 2008.

  1. Chance360


    Hi There,

    Good day to everyone here! Been Awhile.

    Please allow me to introduce myself.

    I'm interested at the moment in learning a little bit about options (how to read an option, option chains (calls and puts), etc, and also I am hoping that I can obtain some assistance, in directing me toward the steps I need to take. I'm just not sure where to start. There is so much information and I'm just not sure what the best approach would be.

    However, I'm not quite interested in attempting to capitalize on options or make money, this time around. I selected this moreso as an opportunity to learn a little bit more about the market in general, through the guideline that I have to follow.....hence the opportunity presented itself.

    Feel free to propose what I should do...............what books to read, links to sites, etc

    I'm not worried about strategies or anything, I am looking to cover a wide range of consumable info, but mainly targeted toward this stuff- (below)

    -Learn how to read an option
    -Learn how to read an option chain, (for calls and puts)
    -Select and analyze 15-20 options
    -For the 15-20 options chosen, student must write a 1-page justification for each as to why he/she would or would not invest in them (use typical market terminology)
    -Virtually trade a minimum of 5 options
    -Put together a option portfolio
    -Chart options daily for a minimum of 2 months
    -Complete investment tracking records for 15 companies
    -Print analysis report for each company

    Well, thanks a lot for any help at all.

  2. MTE


    LOL, I love this one! A student must write a 1-page...:D:D:D

    You can find all the recommended books in the books section of this site as well as this thread.

    Btw, charting an option wouldn't do you much good. Options derive their value from the underlying so it is the price of the underlying that is much more important, along with volatility and etc.
  3. Jaques


    I also new to options,but for my very little experience,I must say two things are important.
    First,the commission and bid/ask spread must be low.

    Second,focusing on time value is more important than focusing on volatility.While volatility is definitely important,but time value matters much.

    I have some puts on financial stock since end of December,I think I am being killed by the decay of time,while the stock is in fact dropping..
  4. MTE


    Time value is the function of volatility (and time to expiration) so the two are really the same thing.

    You are probably referring to the time decay not time value. There's a difference - time value is eroded by time decay.
  5. For the basics, go to It's a good place for beginners.
  6. Jaques


    Yeah,I get confused with those terms.I mean decay of time.