OPTIONS COMPREHENSION!!!

Why can I not wrap my head around options trading....

I have read the threads on this site and referenced the educational links posted and attepted to understand but my brain just cannot grasp the fundamentals.

• Write a Covered Call
• Close a Covered Call
• Perform a Buy / Write (Buy a stock position and write a covered call)
• Perform an Unwind (Close a covered call and sell a stock position)

• Buy a call (to open)
• Buy a put (to open)
• Sell a call (to close)
• Sell a put (to close)

I have know idea what these are.....I know call and put!!

Also option charts are like reading greek to me no matter how many charts I reference......

I NEED A TUTOR

THIS TERMINOLOGY IS KILLING ME!!!!

Question - I can "option" positions that i already have in my portfolio?

How does that work?

I hope my frustration can be felt becasue this is slowly not becoming Fun....

Thanks

Quote:

Originally Posted by OldFart 

Let's take one step at a time:

 

If you own 100 shares of a stock, you can sell one contract of call options against it. This called a "covered call ".

 

One contract in options = 100 shares of stock

Thanks O-F....Now for the second step, I understand  that 100 shares are a contract

Im trying to grasp how to set this up.

If i understand....

I bought F at 10.61

I think it will go down ....

I sell a call option 

WHAT WOULD THIS ACTION BE CALLED PER THE LIST BELOW?

• Write a Covered Call
• Close a Covered Call
• Perform a Buy / Write (Buy a stock position and write a covered call)
• Perform an Unwind (Close a covered call and sell a stock position)

• Buy a call (to open)
• Buy a put (to open)
• Sell a call (to close)
• Sell a put (to close)

I set the strike price at 11.00  for .90 per share x 100 = $ 90.00

WHO SETS THE COST (.90) FOR THE OPTION?

Hopefully somebody buys the option and the stock indeeds go down

THEN DO I POCKET THE $90.00 AT THE EXPIRY DATE AND CONTINUE TO HOLD F?

WHAT HAPPENS IF THE STOCK GOES PAST THE STRIKE PRICE OF 11.00?

HE THEN BUYS MY 100 SHARES AT 11.00 AND I EAT THE LOSS?

THANKS