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Options 101: A Quickstart Guide of US options trading on moomoo

US Options trading is now available on moomoo Malaysia for a while! How's your trading experience?
If you're new to options trading, or simply just want to learn the ropes, the moomoo Learn team is here to provide the ins and outs of trading options on moomoo.
Common questions covered in this article:
1. What are options?
2. Why are so many advanced investors interested in options trading?
3. Two practical tips before you start
What are options?
There are two types of options: calls and puts.
A call option gives its holder the right, but not the obligation, to buy shares of the underlying stock at the strike price on or before its expiration date. Conversely, a put gives its holder the right, but not the obligation, to sell shares of the stock at the strike price on or before its expiration date.
An option contract has four key elements: the underlying stock, the strike price, the premium, and the expiration date.
Check out this video course for a quick recap of options trading>>
Options 101: A Quickstart Guide of US options trading on moomoo
Why are so many advanced investors interested in options trading?
Options can be a useful tool for trading and investing, particularly in volatile markets. They offer leverage, the ability to hedge, and the potential to generate income.
However, it's important to note that options trading involves risks and is not suitable for all investors.
Options can help manage risk exposure in portfolios or individual positions in response to market swings. Beyond risk hedging, investors widely use options for speculation and income generation.
One of the key benefits of options is leverage. This allows the buyer to pay a relatively small premium for market exposure compared to the cost of purchasing the stock outright. As a result, an investor can achieve significant percentage gains from relatively small, favorable moves in the underlying asset.
However, if the underlying stock price does not move as anticipated during the option's lifetime, leverage can also magnify the investment's percentage loss.
Two practical tips before you start
1. Learn how to pick options for a stock:
Use the Options Chain on moomoo to find and choose the right options.
2. Start with papertrading:
Practice: Try trading without real money to learn how to pick options with the right expiration date and when to sell them.
Get Familiar: Learn how to use moomoo’s paper trading features to avoid mistakes when you start real trading.
Here is your quick access to Options learning resources>>
That’s all for today’s options sharing. If you find it helpful, please give us a “”!
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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