Things You'll Need:
- Brokerage account Money for transactions
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Step 1
Evaluate which options to purchase or sell based upon research of the underlying stock. Research stock by looking at its Price/Earnings (PE) ratio, trading volumes, board of directors, research and development plans.
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Step 2
Select the options to buy or sell. The options symbol looks different from the traditional stock symbol. The symbol for the option is formatted as: stock symbol, option expiration date and strike price. If the option, right, to buy or sell is not exercised, the option expires--the invested money is lost. The strike price is the price at which the underlying stock can be purchased or sold.
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Step 3
Calculate all transaction costs. Contact the brokerage to verify the fees. As with any financial transaction, there are brokerage and commission fees. The fees associated with buying or selling options are different from those associated with buying or selling stocks.
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Step 4
Check the account that will be used to handle the transaction. Ensure there is enough money to pay for purchases and fees.
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Step 5
Call the brokerage to place the transaction or place the transaction online. Have the option symbol and the amount of options to purchase ready.
