The right option, explained.

Option

A contract giving the right, not the duty, to buy or sell 100 shares at a set price until a set date.

Call

The right to buy at the strike. Gains when the stock rises above it.

Put

The right to sell at the strike. Gains when the stock falls below it, which is why puts work as insurance.

Strike

The set price in the contract. A $350 call lets you buy at $350 however high the stock goes.

Expiry

The last day the option exists, usually a Friday.

Premium

The option’s price, quoted per share. One contract is 100 shares: a $2.50 option costs $250.

Breakeven

The stock price at expiry where you neither make nor lose money.

Spread

Buying one option and selling another. The one you sell cuts the cost and the risk, and caps the gain.

Win chance

How often the trade ends in profit if the stock moves the way option prices expect. The market’s odds, not a forecast.

Assignment

When an option you sold is exercised, you must buy or sell the shares at the strike. It can happen before expiry.

1. Read the market. It loads option prices for the first expiry that lasts through your timeframe and reads how far the stock typically moves by then. Your answer on the slider is measured against that.
2. Turn your answers into a scenario: a target price, with room either side, because nobody calls the exact price.
3. Test every trade. Every sensible strike combination for each strategy that suits your view, filled between the bid–ask midpoint and the worse side, plus a $0.65-a-contract commission.
4. Keep what fits. It must make money if you’re right, pay at least 25% of what it risks, and stay within your limit. Every trade here has a capped loss.
5. Rank by your goal, with simpler trades winning near ties.

Prices from Yahoo Finance, delayed about 15 minutes. If live option prices can’t be loaded, they’re estimated from the stock’s own volatility and labelled. Probabilities assume a bell curve, which underplays sudden jumps.