High IV makes options more expensive. Buying when IV is low and selling when IV is high is a common strategy. 5. Steps to Trade
Note: Only sell "Covered Calls" (where you already own the shares) to limit risk. Selling "Naked Calls" has infinite risk and is not recommended for beginners. Limited to the premium received. 4. Key Terms to Know
You buy a call if you expect the stock price to rise significantly. You pay a fee called a Premium .
The stock price rises above your strike price plus the premium you paid (the Breakeven ).
You don't have to wait for expiration. You can "sell to close" a bought call or "buy to close" a sold call at any time to lock in profits or cut losses.
The stock price is higher than the strike price.
High IV makes options more expensive. Buying when IV is low and selling when IV is high is a common strategy. 5. Steps to Trade
Note: Only sell "Covered Calls" (where you already own the shares) to limit risk. Selling "Naked Calls" has infinite risk and is not recommended for beginners. Limited to the premium received. 4. Key Terms to Know buying and selling call options
You buy a call if you expect the stock price to rise significantly. You pay a fee called a Premium . High IV makes options more expensive
The stock price rises above your strike price plus the premium you paid (the Breakeven ). Steps to Trade Note: Only sell "Covered Calls"
You don't have to wait for expiration. You can "sell to close" a bought call or "buy to close" a sold call at any time to lock in profits or cut losses.
The stock price is higher than the strike price.