If you’re just getting started with options trading, it can feel overwhelming at first.

But don’t worry—learning a few key terms will help you build a strong foundation and start trading with confidence.

Here are four essential terms every options trader should know:

  • Strike Price – This is the price at which you can buy or sell the underlying stock if you choose to exercise your option. Think of it as the “target price” for the trade.
  • Premium – The price of the option itself. If you’re buying an option, you pay the premium. If you’re selling an option, you collect it.
  • Expiration Date – Every options contract has a set date when it expires. If the option isn’t exercised by this date, it becomes worthless.
  • Delta – A number that tells you how much an option’s price is expected to change when the stock moves $1. This can be used to gauge how sensitive an option is to underlying price movement.

Understanding these basics will help you start to make sense of options trading.

At NavigationTrading, we break down options trading into simple, easy-to-follow steps so you can trade with confidence.

Whether you’re just getting started or looking to refine your skills, we’re here to help you every step of the way.

Here’s to your trading success,

– The NavigationTrading Team