What an option actually is
An option is a contract between two people about a stock — with a set price and a deadline. The cleanest way to picture it is insurance. A homeowner pays a small amount now for the right to be made whole later if something goes wrong; the insurer collects that payment and takes on the risk. An option is the same handshake: one side pays for a right, the other side collects the cash and takes on an obligation.
There are exactly two kinds. A call is the right to buy 100 shares at a set price before the deadline — you would want one if you expect the stock to rise. A put is the right to sell 100 shares at a set price before the deadline — you would want one if you expect the stock to fall, or to insure shares you already own.
Hold on to one number above all: one contract controls 100 shares. Every price you see is quoted per share, but you trade in blocks of 100. A quote of $2.00 means $200 for the contract. That is the whole shape of the deal — no Greeks required to understand it.
Why the seller gets paid
In the insurance business, the company that collects the premiums — not the customer buying coverage — is the one running the profitable operation. Most policies never pay out, so the premiums add up over time. Selling options works the same way. When you sell (or "write") an option, you collect the premium up front, and in return you take on a defined obligation: to buy, or to sell, 100 shares at the agreed price if the other side chooses to use their right.
Time is on the seller's side. An option loses value as its deadline approaches, and that steady decay flows to whoever sold it. That is why consistent-income strategies live on the selling side — you are the insurer collecting, not the customer paying.
Be honest about the trade-off. The seller's gain is capped at the premium collected, while the obligation is entirely real. If the stock moves hard against you, you must honor the contract — buy shares you have now overpaid for, or hand over shares below what they are worth. You get paid for taking that risk, not for dodging it. The rest of this course is about choosing obligations you would genuinely be comfortable honoring.
The cash-secured put, honestly
Worst case, first. The stock falls and you are assigned: you buy 100 shares at the strike price, using cash you set aside for exactly this. If the stock keeps falling from there, those shares are worth less than you paid. That is the real risk, and it is the first thing you should know before anything else.
Here is the whole trade. You sell a put on a stock, and you keep enough cash in the account to buy 100 shares at the strike — that "set-aside cash" is the cash-secured part. You collect the premium immediately. Then one of two things happens: either the stock stays above your strike and the put expires worthless, so you keep the premium and buy nothing; or the stock drops to or below your strike and you are assigned the 100 shares at that price.
The upside is hidden in how you choose the trade. If you only sell puts on stocks you would be glad to own, at a strike you would be glad to pay, then that worst case becomes simply: "I bought a stock I chose, at a discount I named, and I was paid to wait for it." That reframing is why the cash-secured put is the calmest place to begin.
The covered call
Worst case, first. The stock falls. A covered call does not protect your shares — if the stock drops, you take that loss like any stockholder, cushioned only by the premium you collected. That is the position’s real risk, and it is the first thing to be clear about. The second: if the stock rises past your strike, your shares get called away — you sell at the strike, keeping the premium and every dollar of gain up to it, but giving up everything above. If the stock doubles, you still sell at your strike and watch the rest go to the buyer.
Now the income. A covered call is what you do with shares you already own and would be content to sell at a somewhat higher price. You collect premium today in exchange for agreeing to that sale. If the stock stays below your strike, the call expires worthless — you keep the premium, you still own the shares, and you are free to do it again next month. If it rises past the strike, you sell at a price you had already decided was good, with the premium on top.
It is called "covered" because you own the shares that back the obligation. You are not exposed to runaway loss on the option itself — you are simply trading the far upside for steady income on stock you already hold.
Reading the numbers
Every trade on the board and in the builder shows the same short list of numbers. Learn these and the product stops looking like a cockpit — the words on this page are the exact words you will read there.
- Premium — the cash you collect for selling, quoted per share. Multiply by 100 for the whole contract.
- Strike — the price you are agreeing to buy or sell 100 shares at.
- Expiry / DTE — the deadline, and "days to expiration." A shorter DTE decays faster in your favor but leaves the stock less room to move your way.
- Assignment odds — roughly how likely you are to actually be handed the shares. On the board it reads "Assignment ≈ X%."
- Est. win — a model estimate of the chance the trade finishes profitable. It is a probability, not a guarantee — the product says exactly that on every card, and so do we.
- Capital at risk — the cash genuinely committed if the worst case happens.
When Remora shows any of these, treat them as guidance drawn from live options data, not a promise. Assignment odds and risk notes are guidance, not guarantees — the honest framing travels with the number.
Your first trade, calmly
You do not need a perfect setup to begin. You need a small, honest one. Hold these four in mind before you place anything:
- Only cash you can genuinely commit — money you will not need if it is tied up in shares for a while.
- Only stocks you would actually be happy to own — the strike is a price you are choosing to pay or accept.
- Start small — one contract, one stock you understand.
- The board's Est. win is a probability, not a promise — a high number is a tailwind, never a certainty.
Here is the calm path in Remora, end to end. Open the board and find an idea that fits something you would own → hit Build & simulate to see the payoff and the honest metrics before you commit a dollar → Save & track so the position lives in your portfolio and you can watch it. If anything along the way is unclear, the Ask Remora chip is on every page — ask it in plain English, like "what happens if this gets assigned?", and it answers from live data.
That is the whole loop. Understand the shape, pick something you would own, start small, and let the numbers — not a hunch — carry the decision.