Before you learn how options work it’s important that you know how markets in general work. Obviously supply and demand is what every market is all about. You’ll learn much more than that, including long and short positions, volume and open interest, the bid ask spread. You will also learn about the many different types of orders that can be entered.
After you have a firm grounding in market fundamentals then you’ll be able to move onto options fundamentals. You’ll start out by learning about a real life situation that employs the fundamentals of options trading. You the learn a little about the history of options trading dating back to ancient Greece and progressing through eighteenth century England and nineteenth century America, finishing up with introduction of listed options in 1973.
Next in line is learning the actual mechanics of options trading. You’ll need to know these inside and out before you venture into deploying different options strategies. You’ll learn about the different types of options and their strike prices and expiration cycles. The different style options will be presented. You’ll learn about the different options series and classes of options. The exercise and assignment of options will be covered. Most importantly you’ll learn about option premium which is comprised of either time value, expiration value or a combination of both.