Options Are Not Gambling (If You Do It Right)
Options are tools. Dangerous if you don't know how to use them, powerful if you do.
The Greeks
Delta: How much the option moves per $1 stock move. Theta: Time decay — enemy of buyers, friend of sellers. Gamma: How fast delta changes. Vega: Sensitivity to implied volatility — critical around earnings.
Starter Strategies
Long calls/puts: Simple directional bets. Risk limited to premium paid.
Vertical spreads: Buy one option, sell another. Defined risk. The smart beginner move.
Cash-secured puts: Sell puts on stocks you'd own. Get paid to wait for lower prices.
5 Rules That Save Beginners
1) Never risk more than 2% per trade. 2) Always know max loss before entry. 3) Don't trade the first 15 minutes. 4) Avoid holding through earnings until you understand IV crush. 5) Paper trade 30 days before going live.
