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Buying Options
means purchasing call or put contracts that give you the right (but not the obligation) to buy or sell 100 shares of the underlying stock at a specified price before expiration.
Buying options limits your maximum loss to the premium paid while offering leveraged upside. It's the most common way new traders enter the options market.
Quick answer
To buy options: 1) Open a brokerage account with options approval, 2) Pick a ticker and direction (calls = bullish, puts = bearish), 3) Choose expiration (30-60 days out for beginners), 4) Select strike (ATM or slightly OTM), 5) Use limit orders near the mid price. Max loss = premium paid. Start small with 1-2 contracts.
Buying an option means choosing type, strike, and expiration, then paying the premium via a limit order near the mid — risk is capped at the premium paid.
Getting Started: What You Need to Buy Options
Buying options is simpler than most people think. You need a brokerage account with options trading approval (Level 1 or 2 is sufficient for buying calls and puts), some capital, and a basic understanding of how contracts work. Every options contract controls 100 shares of the underlying stock.
Example: If AAPL trades at $180 and you buy one $180 call for $5.00, you pay $500 (100 shares x $5.00). If AAPL rises to $190, your call is worth at least $10.00 ($1,000)—a 100% return. If AAPL stays below $180, you lose your $500 premium. That's your maximum risk.
ApexVol Terminal
Options analytics, live.
Chains, IV rank, expected move and dealer positioning for 5,500+ US stocks and ETFs.
- Live chains and Greeks
- IV rank and percentile
- Expected move and GEX
- Screener and strategy P&L
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Step-by-Step: How to Place Your First Options Trade
Step 1: Choose Your Direction
Buy calls if you're bullish (expecting the stock to rise). Buy puts if you're bearish (expecting the stock to fall). Your directional conviction drives everything else.
Step 2: Select an Expiration Date
For beginners, choose 30-60 days to expiration. This gives your trade time to work without excessive theta decay. Avoid weekly options (too fast) and LEAPS (too expensive) until you gain experience.
Step 3: Pick a Strike Price
Start with at-the-money (ATM) strikes. They cost more but have higher probability of profit. Slightly OTM options (one or two strikes away) offer more leverage at the cost of lower probability.
Step 4: Place Your Order
Always use limit orders, never market orders. Set your limit price at the mid-point between the bid and ask. If the bid is $4.80 and ask is $5.20, start with a $5.00 limit. Adjust if not filled within a few minutes.
Managing Risk When Buying Options
The biggest advantage of buying options is defined risk—you can never lose more than the premium paid. But that doesn't mean you should risk your entire account on one trade.
Position sizing rules: Risk no more than 2-5% of your account on any single options trade. If you have a $10,000 account, limit each trade to $200-500. This ensures you can survive a string of losses while learning.
Set mental stop-losses at 50% of the premium paid. If you bought a $5.00 option and it drops to $2.50, consider cutting your loss rather than hoping for a recovery. Time decay works against buyers, and options rarely recover from large drawdowns.
Key Takeaways
- Buy calls for bullish bets, puts for bearish bets—max loss is the premium paid
- Start with 30-60 day expirations and ATM strikes as a beginner
- Always use limit orders at the mid-price, never market orders
- Risk no more than 2-5% of your account per trade
- Close positions with 7-14 days remaining to avoid accelerating theta decay
Run the numbers before you trade. P&L chart, breakeven & Greeks for any options trade. Free, no signup. Or model any multi-leg trade in the options profit calculator.
Options Profit Calculator- Written by
- ApexVol Research Team
Quantitative options research. All calculations use live institutional-grade data — the same source professional volatility desks use. - Reviewed by
- Ryan Silk, ApexVol Founder
Reviewed for technical accuracy. 10+ years trading options; built ApexVol's pricing engine, Greeks model and IV-rank methodology.
Revised as market conditions and institutional data change. Last revised 2026-03-01. How we research →
Questions
What people ask
about this.
How much money do I need to buy options?
You can buy options with as little as $50-500 depending on the stock and strike price. A single contract controls 100 shares. For example, a $2.00 option costs $200 (100 shares x $2.00). Start with cheaper contracts on liquid stocks like AAPL or SPY to learn.
What is the best strike price to buy?
For beginners, at-the-money (ATM) or slightly out-of-the-money options offer the best balance of cost and probability. ATM options have roughly 50% chance of expiring in-the-money. Avoid deep OTM options—they're cheap but rarely profitable.
How long should I hold a bought option?
Most traders buy options with 30-60 days to expiration and close them with 7-14 days remaining. This avoids the worst theta decay that accelerates in the final week. Never hold options to expiration unless you want to exercise them.
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