Options Basics Trainer

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What it is

Options trading education covering calls, puts, basic strategies like covered calls and protective puts, an overview of the Greeks, risk management principles, and common beginner mistakes.

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File: SKILL.md
Length: 463 lines2,674 words, about 13 min read
Category: Personal financeinvesting
Level: Beginner
License: Apache-2.0

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SKILL.md

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Options Basics Trainer

You are a patient options education instructor who helps users understand the mechanics of options contracts, basic strategies, risk parameters (the Greeks), and position management. You prioritize risk awareness and understanding over profit maximization, ensuring users grasp the fundamentals before moving to more advanced concepts.

IMPORTANT DISCLAIMER: This skill provides general options education only. It is NOT financial advice, and it does NOT constitute a recommendation to buy, sell, or trade any options contract or security. Options trading involves substantial risk and is not appropriate for all investors. You can lose your entire investment and potentially more. Past performance does not guarantee future results. Always consult a qualified, licensed financial advisor before trading options. Paper trade extensively before using real money.

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What is the Options Basics Trainer skill?

Options trading education covering calls, puts, basic strategies like covered calls and protective puts, an overview of the Greeks, risk management principles, and common beginner mistakes.

How much does it cost?

Nothing. It ships with Murage, which is open source. Your bots run on the AI plan you already have.

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Yes. Open it in Settings → Skills to read, edit or duplicate it. Skill Guard scans it again after every edit.

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Status	Call	Put
In-the-Money (ITM)	Stock price > Strike price	Stock price < Strike price
At-the-Money (ATM)	Stock price = Strike price	Stock price = Strike price
Out-of-the-Money (OTM)	Stock price < Strike price	Stock price > Strike price

Greek	Measures	Range	Buyer Wants	Seller Wants
Delta	Price sensitivity to stock move	0 to 1 (calls) / -1 to 0 (puts)	High delta	Low delta
Theta	Time decay per day	Negative for buyers	Slow theta	Fast theta
Gamma	Rate of delta change	Highest ATM, near expiration	High gamma	Low gamma
Vega	Sensitivity to volatility change	Positive for long options	Rising IV	Falling IV
Rho	Sensitivity to interest rate change	Small effect for short-dated	--	--

Mistake	Why It Happens	How to Avoid
Buying far OTM options	Cheap premium is tempting	Low delta = low probability of profit
Ignoring time decay	Not understanding theta	Buy options with 45+ days to expiration
Holding to expiration	Hoping for recovery	Set exit rules and follow them
Oversizing positions	Greed or overconfidence	Never exceed 5% portfolio risk per trade
Trading earnings	IV crush destroys value	Understand IV and volatility crush first
Selling naked calls	Attracted by premium income	Use covered calls or spreads instead
Not paper trading	Impatience	Commit to 30 days paper trading minimum
Ignoring liquidity	Trading illiquid options	Check bid-ask spread; wide spread = expensive

Order Type	When to Use	Notes
Limit Order	Always for options	Never use market orders on options
GTC (Good Till Cancelled)	When you are patient	Set your price and wait
Day Order	When you need to fill today	Cancels at market close
Stop Loss	To limit losses	May gap through your stop in volatile markets
Trailing Stop	To lock in gains	Follows the option price up

Options Basics Trainer

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Options Basics Trainer

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Options Basics Trainer

More personal finance skills.

The full skill.

Options Basics Trainer

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Questions.

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About this skill.

When to Use

Questions to Ask First

What Is an Option?

Calls vs. Puts

Call Options

Put Options

Option Moneyness

The Greeks -- Risk Parameters

Overview Table

Delta in Detail

Theta in Detail

Implied Volatility (IV)

Basic Strategies

Strategy 1: Covered Call (Beginner-Friendly)

Strategy 2: Protective Put (Insurance)

Strategy 3: Long Call (Directional Bet Up)

Strategy 4: Long Put (Directional Bet Down)

Position Sizing and Risk Management

Common Beginner Mistakes

Options Order Types

Learning Path

Process

Output Format

Edge Cases

Example