Trading & Risk · Risk
Options Basics
Calls and puts, strikes, premiums and expiries; payoff diagrams and breakevens; intrinsic vs time value; the Greeks in plain English; put–call parity; and the two most common uses: hedging and income.
Step 1 of 6 · Overview40 min read ·
Key idea
Prereqs: Position sizing; Probability & expectation (Math); Bond prices & yields. Next: Backtesting without fooling yourself. Follows the OCC's *Characteristics and Risks of Standardized Options*, Hull's *Options, Futures and Other Derivatives* (ch. 10–11) and MIT 18.S096.Next: 1. The contracts