How to Trade Stock Options in 5 Easy Steps

Want to participate in the comments? Click here to watch on YouTube.

And if you aren't subscribed to my channel for weekly videos - click here. 

Step #1: Bullish or Bearish?

First you're going to want to decide if you're bullish or bearish. If you're bullish you think the stock is going up and if you're bearish, you think the stock is going to go down.

Figuring out if you're bullish or bearish is going to help determine if you should use a call or put option.

Step #2: In, Out, or At the Money?

Next you're going to need to decide if want an in, out, or at the money call or put option.

Step #3: Expiration Date?

Now you have to determine how much time you want on your options trade.

Option trades don't last forever...they have expiration dates. You have to make sure you're giving the stock enough time to do what you think it's going to do.

Step #4: Place Your Trade 

The next step is simple: place your trade and sit back and wait.

Easy day.

Step #5: Exit or Exercise?

Finally you have to decide if you're going to exit the trade early or at least get out before expiration Friday at 4pm if you don't plan on actually buying the stock.

Basically, if you don't want to lose your stock or buy some stock you never wanted to own in the first place, you've got to make sure you close it out.

Check out the 5-Part Money Mondays: Options Series below:

 Learn to Trade Options - Click here

Call Options Explained - Click Here

Put Options Basics - Click Here

What Are Options Spreads - Click Here

Top 10 Options Trading Questions - Click Here