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Options 101

Ten short lessons with charts and worked numbers. Each one teaches an idea, then checks it.

Start Lesson 1 →or take the 2-minute placement quiz

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Your path

  1. Lesson 1The contract
  2. Lesson 2Calls vs puts
  3. Lesson 3Premium & moneyness
  4. Lesson 4Time decay
  5. Lesson 5IV & earnings crush
  6. Lesson 6Greeks
  7. Lesson 7Spreads
  8. Lesson 8Sizing & max loss
  9. Lesson 9Assignment
  10. Lesson 10Event planning

Then the final →

Your skill map

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Goal: level 4 on every bar.

What you'll be able to do
  1. Explain what an equity option contract is, who has the right and who has the obligation, and why one contract covers 100 shares.
  2. Describe the payoff at expiration of long and short calls and puts, and compute breakevens.
  3. Split any option's premium into intrinsic and extrinsic value, and classify strikes as ITM, ATM, or OTM.
  4. Explain why time decay (theta) speeds up as expiration nears, and which options lose the most.
  5. Explain implied volatility, estimate an earnings implied move from a straddle price, and explain IV crush.
  6. Use delta, gamma, theta, and vega in plain words to estimate how an option's price reacts.
  7. Compare buying vs selling options, and compute max loss, max gain, and breakevens for vertical spreads and iron condors.
  8. Size a position from its max loss and a stated risk budget, and explain why premium paid and max loss aren't always the same thing.
  9. Explain exercise, assignment, automatic exercise at expiration, early exercise (including the dividend case), and pin risk.
  10. Use the mrkts.gg economic and earnings calendars to list which scheduled events fall inside a position's life, and explain what each could do to the price and IV.

Method adapted from Jane Street's socratic-tutor (MIT). Jane Street does not endorse mrkts.