Right to buy
A call buyer has the right, but not the obligation, to buy the underlying at the strike under the contract terms.
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Options Trading 101 — The Foundation is a clean starting point for understanding the contract before the chart, the setup, or the order.
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01THE
FOUNDATION
FOUNDATION
Discipline.Confirmation.Execution.
01 / Published lesson
How an Options Contract Works
One lesson is published in this preview. The full course, every unfinished lesson, and every roadmap item below are clearly In development.
Right to sell
A put buyer has the right, but not the obligation, to sell the underlying at the strike under the contract terms.
Corresponding obligation
An assigned call seller has the obligation to sell; an assigned put seller has the obligation to buy. Buying an option is not owning shares.
Trading options requires specific approval from a brokerage firm. This preview does not offer paid enrollment or checkout.
Contract anatomy
Read every field.
The underlying is the reference asset. The type establishes the buyer's right. The strike is the contractual price. Expiration sets the time boundary. Premium is quoted per share, then multiplied by the contract multiplier.
Hypothetical example
One standard, unadjusted 100-share XYZ $100 call bought for $3 per share has a $300 premium before fees. Adjusted contracts can have different deliverables.
Premium breakdown
In the money is not the same as profitable.
At hypothetical XYZ $102 with a $3 premium, the call has $2 intrinsic value plus $1 extrinsic value per share. Even when an option is in the money, premium and other costs still matter.
Intrinsic$2.00 / share
Extrinsic$1.00 / share
Total premium$3.00 / share
Expiration math
Define the outcome before the trade.
[max(XYZ price − $100, 0) − $3] × 100
Hypothetical long-call formula · pre-fee, pre-tax · excludes stock exposure after exercise.
XYZ $102−$100
Breakeven: XYZ $103$0
XYZ $120+$1,700
Quote literacy
Midpoint is a reference.
Bid $2.90, ask $3.10, midpoint $3.00, spread $0.20 per share. Midpoint pricing does not guarantee a fill or represent an actual market quote.
Bid$2.90
Midpoint$3.00
Ask$3.10
Spread$0.20
Expiration
Worthless is possible.
An option can expire worthless. Exercise can create underlying-share exposure. This lesson's long-call formula explicitly excludes that post-exercise stock exposure.
Broker procedures
Confirm the cutoff.
Automatic-exercise conventions, broker-specific cutoffs, and procedures can differ. Consult the brokerage for its current rules; do not assume an automatic exercise or assignment outcome.
Risk disclosure
Educational only—not financial advice.
Options involve risk and are not suitable for all investors. Options can lose the entire premium, and sellers can face significant obligations. There is no profit guarantee.
02 / Check your understanding
Three questions. No guesswork.
Open each question to see the answer and the reason.
A hypothetical option is quoted at $2.40. What is the standard 100-share premium before fees?
$240 before fees: $2.40 × 100 = $240.
Option premiums are quoted per share for a standard equity contract, so the quote is multiplied by the contract multiplier.
What contractual right does a put buyer receive?
The right, but not the obligation, to sell the underlying under the contract terms.
The assigned put seller has the corresponding obligation to buy the underlying at the strike under the contract terms.
Does a $3.00 midpoint guarantee that an order will fill at $3.00?
No. Midpoint pricing is a reference, not a guaranteed fill or an actual market quote.
The bid and ask can move, and available liquidity can change before an order executes.
03 / Planned course
The rest is in development.
The preview publishes one contract-mechanics lesson. These are planned future lessons, not available content.
01Candle bodies and wicksIn development
02TimeframesIn development
03Trends and rangesIn development
04Support and resistanceIn development
05Higher highs and lowsIn development
06Lower highs and lowsIn development
07Breakouts and retestsIn development
08Failed breakoutsIn development
09Bull and bear flagsIn development
10Double tops and bottomsIn development
11TrianglesIn development
12HammerIn development
13Shooting starIn development
14DojiIn development
15Engulfing candlesIn development
16Reading the options chainIn development
17Premium drivers and GreeksIn development
18Risk and expirationIn development
19Building a market planIn development
20Practice/reviewIn development
BURAKTHESCALPER framework
30-minute context / 5-minute confirmation
This is BURAKTHESCALPER's educational planning framework—not established contract mechanics. Each future pattern lesson is planned to include a simple definition; valid and failed examples; context, confirmation, and invalidation; bullish and bearish scenarios with risk; and a practice chart with an explained answer.
Patterns are possibilities, not guarantees. Correct price direction can still lose because of premium, timing, volatility, and spreads.
When historical charts are added, they will identify the ticker, timeframe, date, and source. Non-historical illustrations are clearly hypothetical.
04 / Planned materials
Tools for the process.
These materials are planned for the course and are not presented as published lessons.
Glossary
In developmentContract worksheet
In developmentRisk checklist
In developmentTrading journal
In development05 / Take the preview with you
Download the foundation.
The PDF carries the lesson content, calculations, diagram labels, roadmap, quiz, planned materials, source links, and disclosures in a readable, searchable document.
06 / Source check
Start with primary education.
Options explanations and disclosures were checked against these official sources. The figures on this page are hypothetical and no unsupported quote is presented as real.