Options trading cheat sheet for beginners

Print this page (Ctrl/Cmd+P) or save as PDF. Short reminders for calls, puts, the ×100 multiplier, and four common structures. Educational only — not financial advice.

Must-remember rules

1 listed equity option contract usually = 100 shares. Premium $1.50 ≈ $150 per contract.
Long call = right to buy. Long put = right to sell (often compared to insurance).
Buyers pay a debit (max loss ≈ premium). Sellers receive a credit (risk depends on whether the short is covered or a spread).
Break-even is at expiry, before fees: call ≈ strike + premium; put ≈ strike − premium.

Core formulas

Strategy	Break-even (approx.)	Max profit	Max loss
Long call	Strike + premium	Unlimited	Premium paid
Long put	Strike − premium	Strike − premium (to zero)	Premium paid
Covered call	Stock cost − premium	(Strike − stock cost) + premium	Stock downside − premium
Cash-secured put	Strike − premium	Premium received	Strike − premium (stock risk)
Bear put spread	Long put strike − net debit	Width − debit	Net debit
Iron condor	Short put − credit / short call + credit	Net credit	Wing width − credit

Strategy guides

Covered call strategy — own shares, sell a call, collect premium
Cash-secured put (CSP) — sell a put with cash ready to buy shares
Iron condor strategy — defined-risk range trade
Wheel strategy — CSP until assigned, then covered calls

Also practice in the Strategy Builder or start at Basics.

Popular strategies to explore

Four common strategies — compare the idea, outlook, and risk before opening the full guide.

🏠Bullish · Income

Covered Call

Own shares and sell a call to collect premium while accepting capped upside.

Learn strategy → 💵Bullish · Entry

Cash-Secured Put

Sell a put with cash ready to buy 100 shares if assigned.

Learn strategy → 📊Neutral · Defined risk

Iron Condor

Use a four-leg credit structure when you expect price to stay in a range.

Learn strategy → 🔄Cycle · Income

Wheel Strategy

Sell CSPs until assigned, then covered calls until the shares are called away.

Learn strategy →

Educational only: Not a broker and not trade advice. Formulas ignore commissions, dividends, and early assignment.