Your First Options Trade
Step-by-step guide to placing your first options trade using Ape AI.
⏱️ Time: 20-30 minutes 💰 Risk Level: High (options are leveraged) 📱 Platform: iOS & Web 👤 Best for: Traders ready for options (not beginners) 🦍 Recommended Companion: Maverick (momentum/options focus) or Money Monty (balanced). Blitz is advanced only.
⚠️ Important Warning
Options are NOT for beginners!
Before trading options, you should:
✅ Understand stocks and how they work
✅ Have traded stocks for at least 3-6 months
✅ Understand you can lose 100% of investment
✅ Only risk money you can afford to lose completely
✅ Have completed options approval with your broker
Start with paper trading first! → Learning Options with Paper Trading
What You'll Learn
How to select an options trade setup
How to evaluate strike price and expiration
How to place your first options order
How to manage risk and exits
Options Trading Basics
What Are Options?
Options = Contracts giving you the RIGHT (not obligation) to buy or sell stock
Two types:
Call Option: Right to BUY stock at strike price
You profit if stock goes UP
Bullish play
Put Option: Right to SELL stock at strike price
You profit if stock goes DOWN
Bearish play
Key Terms:
Strike Price: The price you can buy/sell at
Expiration Date: When the option expires (worthless if not profitable)
Premium: What you pay for the contract
Contract: Controls 100 shares of stock
Example:
Why Trade Options?
Advantages:
✅ Leverage: Control $10,000 of stock for $500
✅ Defined risk: Max loss = premium paid
✅ Flexibility: Profit from up, down, or sideways
✅ Lower capital required than stocks
Disadvantages:
❌ Time decay: Lose value every day
❌ Can lose 100% if wrong
❌ More complex than stocks
❌ Less liquid (harder to exit)
Before You Start
Prerequisites
✅ Knowledge
3+ months stock trading experience
Completed options education course
Understand calls vs puts
Know how expiration and strike work
✅ Account Setup
Options trading approved by broker
Minimum $2,000 account balance (recommended)
Paper trading account for practice
✅ Risk Management
Only risk 1-2% of account per trade
Have stop-loss plan
Know max loss before entering
Test Your Knowledge
Can you answer these?
What happens to my call if stock goes down?
What's time decay and how does it affect options?
What's the difference between ITM, ATM, and OTM?
How do I calculate my max profit and max loss?
If no: → Stop and learn more before risking real money
Step 1: Select Your Stock
Choose a Stock You Know
Good first options candidates:
Liquid, high-volume stocks (AAPL, TSLA, SPY, QQQ)
Stocks you already own or follow
Clear trend or catalyst
Active options market
Avoid for first trade:
Penny stocks
Low-volume stocks
Stocks with no clear direction
Highly volatile meme stocks
Open the Ticker
Go to Chat tab
Switch to Maverick companion (best for options/momentum)
Mention your stock: "I want to trade options on $AAPL"
Step 2: Select Options Trade Quick Prompt
Using the Quick Prompt
In Chat with Maverick or Money:
Look for quick prompt suggestions
Tap "Options Strategy Suggestion" or "Swing Options Setup"
OR -
Type: "Options trade setup for [TICKER], timeframe 2-3 weeks"
Example prompt:
What Maverick Analyzes
Maverick will provide:
Directional bias: Bullish, bearish, or neutral
Technical setup: Key levels, momentum, volume
Catalyst check: Earnings, news, events
Strike recommendations: Which strikes to target
Expiration guidance: How far out to go
Risk/reward: Potential profit vs loss
Example Analysis:
Step 3: Choose Strike Price and Expiration
Understanding Strike Selection
In-The-Money (ITM):
Strike below current price (calls)
More expensive, less leverage
Higher delta, moves more with stock
Good for: Lower risk, beginners
At-The-Money (ATM):
Strike near current price
Balanced cost and leverage
Medium delta (~0.50)
Good for: Most situations, first trade
Out-of-The-Money (OTM):
Strike above current price (calls)
Cheaper, more leverage
Lower delta, needs big move
Good for: Experienced, high conviction
For Your First Trade: Use ATM or slightly ITM
Example:
Choosing Expiration
Time to Expiration (DTE = Days to Expiration):
Weekly (7 DTE):
Cheapest
Highest risk (time decay)
Need to be RIGHT and FAST
For: Experienced day traders only
2-3 Weeks (14-21 DTE):
Good balance
Enough time for setup to work
Not too expensive
For: Active swing traders ✓
30-45 DTE:
More expensive
Time to be patient
Lower time decay stress
For: Position traders, beginners ✓
60+ DTE (LEAPS):
Most expensive
Lowest time decay
More like stock substitute
For: Long-term bullish
For Your First Trade: 2-4 weeks out (14-30 DTE)
Step 4: Review the Trade Setup Card
Maverick Shows Trade Details
Options Trade Setup Card:
Key Things to Check
Before executing:
✅ Liquidity Check
Volume > 100 contracts/day
Open Interest > 500
Bid-Ask spread < $0.20
✅ Cost vs Account Size
Premium < 2% of total account
Example: $30k account = max $600/trade
✅ Greeks Check
Delta 0.40-0.60 for balanced
Theta not too high (< -0.20)
IV not extremely high (< 50%)
✅ Strike Makes Sense
Stock can realistically reach
5-10% move from current price
Above key resistance
Step 5: Execute the Trade
Order Entry
Order Type Selection:
Market Order
❌ NOT recommended for options
Wide bid-ask spreads
Instant execution
Pay more than needed
Limit Order
✅ RECOMMENDED
Set max price you'll pay
Better fill price
Might not fill immediately
For Options: ALWAYS use Limit orders
Setting Your Limit Price
Strategy:
Place the Order
Tap "Execute trade" on setup card
Verify:
✅ Correct ticker (AAPL)
✅ Correct strike ($175)
✅ Correct expiration (12/20)
✅ CALL (not put!)
✅ BUY TO OPEN (not sell!)
✅ Quantity: 1 contract
✅ Limit price: $5.50
Review total cost: $550 + fees
Confirm order
Wait for fill
💡 Tip: If order doesn't fill in 30 seconds, increase limit price by $0.05 and resubmit.
Step 6: Manage the Trade
Set Your Exits IMMEDIATELY
As soon as filled:
1. Profit Target
Set at 50-100% gain
Example: Bought at $5.50, sell at $8.25-11.00
Use Limit order to sell
2. Stop Loss
Set at 30-50% loss
Example: Bought at $5.50, sell if < $2.75-3.50
Use Stop-Limit order
3. Time Stop
Plan to exit by X date
Don't hold into last week before expiration
Time decay accelerates
Maverick's Exit Plan:
Daily Monitoring
What to watch:
Stock Price:
Check once at open, once at close
Don't micromanage intraday
Option Value:
Track if nearing targets
Don't panic on small moves
Time Decay:
Accelerates in final week
Exit if not working by halfway point
Technical Levels:
If stock breaks support = reassess
If hits target = consider taking profit
Common Scenarios and Responses
Scenario 1: Quick Profit (Up 50% in 2 Days)
What happened:
AAPL jumped to $180
Your $5.50 call now worth $8.50
54% profit in 2 days
What to do:
✅ Take profit on half position
✅ Move stop to breakeven on rest
✅ Let rest run to target 2
Why:
Lock in gains
Remove risk
Still have upside exposure
Scenario 2: Slow Bleed (Down 20% in 1 Week)
What happened:
AAPL sideways at $174
Your call now $4.40
Down 20%, time decay eating value
What to do:
⚠️ Reassess thesis
If still bullish: Hold
If uncertain: Exit for small loss
Don't wait for stop loss
Why:
Time is your enemy
Small loss better than big loss
Can re-enter later if setup returns
Scenario 3: Hit Stop Loss
What happened:
AAPL dropped to $171
Your call worth $3.00
Stop triggered at $3.50
What to do:
✅ Exit immediately
✅ Accept the loss
✅ Review what went wrong
❌ DON'T revenge trade
Why:
Thesis invalidated
Preserve capital
Live to trade another day
Scenario 4: Near Expiration (3 Days Left)
What happened:
3 days until expiration
Call still slightly profitable
AAPL at $177 (call at $176)
What to do:
✅ Close the trade TODAY
Don't hold to expiration
Take current profit
Why:
Time decay accelerates
One bad day = all profit gone
Not worth the risk
After Your First Trade
Trade Review
Win or lose, analyze:
What went right:
Entry timing
Strike/expiration choice
Exit execution
What went wrong:
Missed signals
Held too long
Entry too early
What to improve:
Risk management
Patience
Technical analysis
Ask Maverick:
Keep a Trade Journal
Log every options trade:
Risk Management Rules
The 10 Commandments of Options Trading
Never risk more than 2% of account per trade
$10k account = max $200 per trade
Always use limit orders
Never market orders on options
Check liquidity before entering
Volume > 100, OI > 500
Set stop loss before entering
Plan the exit before entry
Don't hold into expiration week
Exit 5-7 days before expiration
Take profits at 50-100%
Don't be greedy
Cut losses at 30-50%
Don't hope and pray
Only trade stocks you understand
No random tickers
Avoid earnings (at first)
Too unpredictable for beginners
Start small, scale slowly
1 contract until consistent
Common Mistakes to Avoid
❌ Don't Do This
1. Buying weekly options (0-7 DTE)
Extreme time decay
Need to be perfect
90% expire worthless
2. Holding through earnings
Volatility crush kills options
Unpredictable moves
Advanced strategy only
3. Selling options (writing)
Unlimited risk as beginner
Learn buying first
Completely different skill
4. Going all-in on one trade
Options can go to $0
Diversify across trades
Never bet the farm
5. Averaging down on losers
Throwing good money after bad
Accept the loss and move on
Reset and find better setup
6. Ignoring the Greeks
Delta, theta, IV matter
Understand before trading
Use them for decisions
7. Trading illiquid options
Wide spreads
Hard to exit
Slippage kills profits
What's Next?
Continue Your Options Education
Paper Trade First:
Practice with fake money
Build confidence
Test strategies
Start Small:
1 contract per trade
Max 2-3 trades open
Build slowly
Learn More:
Ask Maverick:
Troubleshooting
"My order won't fill"
Solutions:
Increase limit price by $0.05
Check if market is open
Verify options trading approved
Try different strike with more volume
"I'm down 30% in 1 day"
Don't panic:
Check if thesis still valid
Review stop loss
One day doesn't define trade
Don't make emotional decision
Ask Maverick:
"Should I roll my losing position?"
For beginners: NO
Just close and accept loss
Rolling is advanced strategy
Start fresh with better setup
Success Checklist
✅ I understand calls vs puts
✅ I know my max loss before entering
✅ I'm using 2% risk or less
✅ I checked liquidity (volume, OI)
✅ I set profit target and stop loss
✅ I'm using limit orders only
✅ I won't hold into expiration week
✅ I'm ready to accept 100% loss if wrong
Remember: Your first options trade is a learning experience. Whether you win or lose, focus on executing the process correctly. Profits come from discipline and patience, not luck! 📈
Stay humble. Stay focused. Trade smart.
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