---
title: "Options Beginner's Guide -- Basic Logic and Rules"
type: "Topics"
locale: "zh-CN"
url: "https://longbridge.com/zh-CN/topics/32242612.md"
description: "I've made fortunes in bull markets and weathered storms in bear markets. I've also seen too many young people thinking they can "turn things around with options," only to lose everything. I've made 10x, 20x, or even more from options, but I've also suffered losses. I believe many beginners or even those who haven't tried options yet would ask: "I saw some options surge 300% in a day. Can I buy some and take a chance?" After hearing this, I just want to say four words: Slow down. You only see the high returns of options, but you must understand that high returns come with high risks. Before diving in, first understand what options are..."
datetime: "2025-07-25T18:32:52.000Z"
locales:
  - [en](https://longbridge.com/en/topics/32242612.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/32242612.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/32242612.md)
author: "[四十五度阳光](https://longbridge.com/zh-CN/profiles/17463232.md)"
---

> 支持的语言: [English](https://longbridge.com/en/topics/32242612.md) | [繁體中文](https://longbridge.com/zh-HK/topics/32242612.md)


# Options Beginner's Guide -- Basic Logic and Rules

I've made money in bull markets and survived bear markets, and I've seen too many young people thinking they can 'turn things around with options,' only to lose everything. I've also made 10x, 20x, or even more profits with options, but I've also suffered losses.

I believe many beginners or those who haven't tried options yet want to ask: 'I saw some option rise 300% in a day, can I buy some to take a gamble?' After hearing this, I just want to say four words: Slow down. You only see the high returns of options, but you must understand that high returns come with high risks. Before diving in, learn what options are, their rules, and basic logic. Prepare before you act! As suggested by @彩子

Today, I'll explain options in the simplest and most down-to-earth way, helping everyone avoid pitfalls.

1\. What exactly are options?  
This has been covered in previous articles, but many might still not understand. Let me explain in plain terms:

With stocks, you buy and wait for them to rise;

With options, you spend a small amount to buy the 'right to bet on direction' without buying the whole stock;

If it rises, you can make a fortune; if not, you might lose everything.

Options = Directional bet + Time gamble + Volatility wager.

2\. Call options vs. Put options: Understand what you're betting on  
Call options (Call): Bet the stock will rise. Suitable for bull markets or positive expectations.

Put options (Put): Bet the stock will fall. Suitable for bear markets or negative events.

But note: It's not as simple as buying Calls if you think it'll rise or Puts if you think it'll fall.

You need to consider three things:

The target price (strike price)

When it will reach that price (expiration date)

How the market prices this bet (volatility)

3\. How to choose the strike price? Not too far, not too close  
Every option has a 'strike price,' the agreed price at which you can buy/sell the stock in the future.

Strike price categories:

Example (stock price $100)  
In-the-money (ITM): Already profitable. Call strike price $90  
At-the-money (ATM): Close to current price. Strike price $100  
Out-of-the-money (OTM): Not yet profitable. Call strike price $110

How to choose? Depends on your risk appetite:  
  
ITM: High success rate, limited gains — Conservative players  
ATM: Balanced risk and reward — Recommended for beginners  
OTM: High risk, high reward — Gamblers or event-driven bets  
  
**Advice: Beginners should avoid deep OTM options. They seem cheap but may end up worthless.**

4\. Long-term vs. short-term options: Time decay is no joke  
Options have a fatal trait: Time value decays daily. Even if the stock doesn't move, your money is bleeding.

This is called Theta (time decay), especially severe for short-term options.

  
Short-term (under 1 week): Cheap, exciting, fast decay — For experienced traders betting on short-term moves  
Mid-term (2 weeks–1 month): Manageable risk, good flexibility — Suitable for most  
Long-term (over 1 month): Expensive, stable, forgiving — For those focused on trends and wary of short-term volatility

Example:  
You buy a weekly Call, and if the stock doesn't move today, the option loses 10–20% by tomorrow. Long-term options decay slower.

Advice: Unless it's for an event (earnings, major meetings), avoid very short-term options. Give the trade time to play out.

5\. How to evaluate potential returns? It's not just about direction, but 'value'  
To judge if an option is worth buying, consider:

Probability of the stock reaching the target (directional bet)

Whether there's enough time left (time factor)

Whether the current price is reasonable (valuation)

Do the math:

If you bet a stock will rise from $100 to $120 and buy a $120 Call with 5 days left, while the stock is at $101, the option is likely worthless.

But if you buy a $110 Call with 1 month left, you have more time to wait, and the odds of hitting the profit zone are higher.

6\. Common mistakes beginners make:  
1: Buying cheap OTM options just because they're cheap

They're cheap, but if the stock doesn't hit the strike price, you get nothing.

2: Ignoring time, waiting for miracles as expiration

Time isn't your friend; it's cutting into your capital.

3: Not selling when up, hoping for 'one more day, double the gains'

If an option doubles, sell; if it triples, sell faster. Don't be greedy.

4: The stock rises, but the option still loses

Could be due to dropped volatility or buying too far OTM.

7\. 'Four-step option strategy'  

1\. Judge the trend: Use Calls in bull markets, Puts in bear markets

2\. Choose the strike price: Not too far, not too close

3\. Control time: Don't buy near-expiration junk

4\. Set profit/loss expectations: Take profits, cut losses, discipline is key  
Final words:  
**Options aren't a tool to get rich overnight but an amplifier for precise bets.**

**If you're right, they can double your gains;**  
**If you're wrong, they can zero you out faster than you think.**

**If you still don't understand strike prices or time decay, don't risk real money. Practice with simulations, learn the rules, then consider betting.**  
If you find this helpful, feel free to follow for more on options, option strategies, advanced options, and investing. May we all reap rewards on this path.  
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## 评论 (29)

- **飞花雪悦 · 2025-10-07T13:57:55.000Z**: mark
- **一飞冲天绿色小宝石 · 2025-09-18T11:40:06.000Z**: Thanks for sharing, Brother Sunshine
- **AceFantasy · 2025-09-12T10:35:31.000Z**: Well written, learned a lot. Thanks, influencer Sunshine.
- **一枚梦想家 · 2025-09-08T06:17:56.000Z · 👍 1**: The blogger wrote really well, providing guidance for beginners.
- **Cc冲冲 · 2025-07-29T03:50:09.000Z**: Bro, write more, newbies want to learn well 🫡🫡🫡
- **Salierri · 2025-07-28T17:02:34.000Z**: 👍
- **wei sir · 2025-07-27T07:24:55.000Z**: Can't learn, dare not do it
- **链路时机 · 2025-07-27T05:19:45.000Z**: I've been trading options for a long time. The stock friends' writing is really good, and they've covered all the key points.
- **摆烂的交易员 · 2025-07-26T04:58:19.000Z**: Thanks, boss. It would be great if you could also talk about selling options, and it would be even better if you could share some examples of successfully profiting from or protecting profits with options. Thanks.
- **榴莲酥也好吃～ · 2025-07-26T03:53:29.000Z · 👍 2**: On the earnings day, I saw a big drop. As a novice, I cautiously bought a call option at 350 with an expiration date of August 15th, bought at 2.5, and sold it at 6 last night. I kept watching the numbers jump, feeling extremely nervous.
- **东风71小炮仗 · 2025-07-26T00:37:47.000Z · 👍 2**: Brother Sunshine wrote well! Like and support.
  - **四十五度阳光** (2025-07-26T00:44:05.000Z): Let's move forward together on this path, growing both our knowledge and profits. Thanks for the support 😄
- **TNHC · 2025-07-25T23:26:46.000Z · 👍 1**: I have a question. If I buy a put option with 1-2 months to expiration, and the underlying stock gradually falls to the strike price, making it an in-the-money option, is the liquidity good? Will there be buyers if I want to sell it?
  - **四十五度阳光** (2025-07-26T00:37:19.000Z): Of course, as long as it's not particularly obscure. In this case, its liquidity is very good, and you basically don't have to worry too much about not being able to sell it.
  - **TNHC** (2025-07-26T04:15:40.000Z): Okay, thank you, boss.
- **貔貅97 · 2025-07-25T20:53:40.000Z**: Well written, I totally agree. Thanks for sharing.
- **四十五度阳光 · 2025-07-25T19:02:21.000Z · 👍 2**: Options are good, but you need to control them and not overuse them. I advocate more for long-term fixed investments in major indices or leading potential stocks, supplemented by options. Investment carries risks, so think twice before acting.
- **水上漂_6bnXiv · 2025-07-25T18:50:14.000Z**: Teacher, which app is relatively more accurate for option price calculation? The option prices for some stocks vary too much across different brokerage apps.
  - **四十五度阳光** (2025-07-25T18:58:04.000Z): Longbridge has some delays and missing Greeks, which is more suitable for beginners. MOOMOO, Niu Niu, and Tiger are better. It depends on personal usage habits.
- **深海农夫 · 2025-07-25T18:46:37.000Z · 👍 1**: Learned
- **建建哥 · 2025-07-25T18:46:26.000Z · 👍 1**: Most people use options with high leverage to chase high returns and do not hold until the expiration date. They usually sell once they make money. Could you elaborate on the specific metrics you personally pay attention to when buying options and how you make your choices? Although I know a bit abo
  - **四十五度阳光** (2025-07-25T18:56:07.000Z): I will write it out in the advanced section later
- **想做安然的子文 · 2025-07-25T18:45:24.000Z · 👍 3**: Can you talk about selling options (or short selling), exercising options, or closing options, which is more cost-effective?
  - **四十五度阳光** (2025-07-25T18:48:52.000Z): I'll write about it when I'm free on the weekend. Feel free to leave a comment if you're interested, and I'll see what everyone is most interested in.
  - **想做安然的子文** (2025-07-25T18:50:02.000Z): Let me see how much it differs from my understanding, while also improving my summarization skills.
  - **ROCKY石生** (2025-07-26T02:44:26.000Z): How to exercise options?
- **陈哆哆 · 2025-07-25T18:40:19.000Z · 👍 1**: Hello, big shot! Could you explain portfolio options again?
  - **四十五度阳光** (2025-07-25T18:46:22.000Z): Follow me for more updates later.