DiraNexus Academy Course

Options Basics (ES & SPX)

Welcome to Options Basics — the first book of the options vertical, and the start of a new chapter built on everything you've learned. An option is a contract that gives the right, but not the obligation, to buy or sell something at a set price by a set time. This book builds from what an option is, through its anatomy (strike, expiration, moneyness, premium), how options work (buyers, sellers, exercise, expiration), reading and using them, and the foundations for trading them responsibly. Options carry real risk; this is plain-language education, not financial advice.

18 modules
Complete course$5990-day course access
Individual lesson$930-day lesson access
Time-limited accessAccess is renewable. No permanent or lifetime access is included.

What Options Are

OB01

OB01 — Start Here: Welcome to Options

Welcome to Options Basics — the first book of the options vertical, and the start of a new chapter built on everything you've learned. An option is a contract that gives the right, but not the obligation, to buy or sell something at a set price by a set time. This book builds from what an option is, through its anatomy (strike, expiration, moneyness, premium), how options work (buyers, sellers, exercise, expiration), reading and using them, and the foundations for trading them responsibly. Options carry real risk; this is plain-language education, not financial advice.

$930-day lesson accessOpen lesson
OB02

OB02 — What Is an Option?

An option is a standardized contract conveying the right, but not the obligation, to buy or sell a specific underlying at a specific strike price by a specific expiration. Every option is defined by four things: the underlying, the type (call or put), the strike, and the expiration. There are always two parties — the buyer (holder), who pays the premium for the right, and the seller (writer), who receives it and takes on the obligation. One contract controls a set quantity of the underlying (a multiplier) — always confirm it. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB03

OB03 — Calls and Puts

There are two basic types of option: a call is the right to buy the underlying at the strike; a put is the right to sell the underlying at the strike. They're the two building blocks of all options. A call holder benefits when the underlying rises above the strike (they can buy cheap); a put holder benefits when it falls below the strike (they can sell high). A rough memory aid: a call holder wants the underlying up, a put holder wants it down — but the type (call/put) is separate from whether you buy or sell the option. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB04

OB04 — The Four Basic Positions

Combine the type (call/put) with the side (buy/sell) and you get the four basic positions: long call, long put, short call, short put. Buyers (long) pay the premium, hold a right, and have defined risk (at most the premium). Sellers (short) receive the premium, hold an obligation, and can face large risk — a short (naked) call carries theoretically unlimited risk, and a short put carries large risk. This buyer/seller risk asymmetry is one of the most important facts in all of options. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson

The Anatomy of an Option

OB05

OB05 — Strike Price

The strike price (or exercise price) is the set price at which an option can be exercised — for a call, the price at which you can buy the underlying; for a put, the price at which you can sell it. The strike is fixed for the life of the option and is the reference point against which the underlying's price is measured. Strikes are listed at set intervals around the current price, giving a ladder of choices. Where the strike sits relative to the underlying drives the option's value. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB06

OB06 — Expiration

Every option has a finite life ending on its expiration date — the deadline by which it must be used or it expires. Time matters enormously: an option's time value decays as expiration approaches, so options are ‘wasting assets.' Time generally works against the buyer (the option loses time value) and for the seller. More time to expiration means more time value in the premium. Chains list a ladder of expirations to choose from. At expiration, an option is exercised/settled if it has value, or expires worthless. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB07

OB07 — Moneyness (ITM / ATM / OTM)

Moneyness describes where the strike sits relative to the underlying's current price. In the money (ITM): the option has intrinsic value — a call with the underlying above the strike, or a put with the underlying below it. At the money (ATM): the underlying is at (or near) the strike. Out of the money (OTM): no intrinsic value — a call with the underlying below the strike, or a put with the underlying above it. Moneyness determines whether an option has intrinsic value, and ITM/ATM/OTM options behave very differently. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB08

OB08 — Premium: Intrinsic & Extrinsic Value

The premium is the price of an option, and it has two parts: intrinsic value + extrinsic (time) value. Intrinsic value is the option's real exercise value — the amount it's in the money (zero if ATM or OTM). Extrinsic value is everything above intrinsic — driven mainly by time to expiration and implied volatility. This is the bridge back to the Volatility Primer: more expected volatility means more extrinsic value, so options cost more. At expiration, only intrinsic value remains. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson

How Options Work

OB09

OB09 — How Option Buyers Profit and Lose

An option buyer pays the premium and has defined risk — the most they can lose is that premium. A long call profits if the underlying rises above its breakeven (strike + premium); a long put profits if the underlying falls below its breakeven (strike − premium). The buyer's maximum loss is the premium (which can be a 100% loss); the maximum gain is large (a call) or large but capped at the strike (a put). Time decay works against the buyer. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB10

OB10 — How Option Sellers Profit and Lose

An option seller receives the premium up front — and that premium is the most they can gain. In exchange they take on an obligation and large risk. A short call profits if the underlying stays at or below the strike (max gain = premium), but a naked short call carries theoretically unlimited risk. A short put profits if the underlying stays at or above the strike (max gain = premium), but carries large risk down to the strike. Time decay works for the seller, but never offsets the large risk. Selling options is advanced and dangerous. Education, not financial advice.

$930-day lesson accessOpen lesson
OB11

OB11 — Exercise & Assignment

Exercise is the holder using their right (buy at the strike for a call, sell at the strike for a put). Assignment is the seller being obligated to fulfill it (sell for a call, buy for a put). American-style options can be exercised any time through expiration; European-style only at expiration. Settlement is physical (deliver/receive the underlying) or cash (pay/receive the cash difference). SPX options are European and cash-settled; ES options are American and settle into ES futures — always confirm style and settlement. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB12

OB12 — Expiration Outcomes

At expiration, only intrinsic value remains. An in-the-money option is typically auto-exercised (and a seller assigned) and settled — in cash (SPX: the cash difference) or physically (ES: into futures). An out-of-the-money option expires worthless: the buyer loses the premium, the seller keeps it. Options very close to the strike near expiration carry ‘pin risk' (uncertain outcome). Holders can usually also close before expiration instead. Always confirm your product's settlement and auto-exercise rules. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson

Reading and Using Options

OB13

OB13 — The Option Chain

The option chain is the table that lists all the options available for an underlying. It's organized by expiration (usually selectable), with strikes down the rows and calls on one side, puts on the other. Each option shows its bid and ask (the prices to sell and buy), often the last price, and volume and open interest (activity and existing contracts — a read on liquidity). To find any option, pick the expiration, then the strike, then the call or put, and read its premium from the bid/ask. Always confirm details on your platform. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB14

OB14 — Payoff Diagrams

A payoff diagram graphs a position's profit or loss at expiration against the underlying's price. The four basic positions have signature shapes: a long call bends up past the strike (loss capped at the premium); a long put bends up as the underlying falls (loss capped at the premium); a short call and short put are their mirror images (gain capped at the premium, large loss). The ‘kink' sits at the strike, and the line crosses zero at the breakeven. Diagrams make max gain, max loss, and breakeven visible at a glance. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB15

OB15 — Why Trade Options?

People use options for several purposes — leverage/capital efficiency, defined risk (for buyers), hedging/protection, income (for sellers), and flexibility to express nuanced views (direction, time, and volatility). Each purpose comes with a real trade-off: leverage cuts both ways, ‘income' from selling carries large risk, and complexity adds moving parts. This module explains why people trade options — it is not a recommendation that you should, or that any purpose is right for you. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson

Foundations for Responsible Options Trading

OB16

OB16 — The Risks of Options

This module gathers, in one honest place, the real risks of options. Buyers can lose 100% of the premium and fight time decay. Sellers face large or even theoretically unlimited risk, plus assignment risk. Options also carry leverage risk (losses amplified), complexity risk (many moving parts), liquidity risk (hard to exit), and volatility risk (value shifts with implied volatility). The protective stance: understand before trading, prefer defined-risk, size small, practice on a demo first, and never risk what you can't afford to lose. Education, not financial advice.

$930-day lesson accessOpen lesson
OB17

OB17 — Options and the Volatility Bridge

Options are priced largely on implied volatility: it's the dominant driver of an option's extrinsic value, and the VIX is essentially packaged S&P implied volatility. So an option's value can change as implied volatility changes, not just as the underlying moves — which is why the Volatility Primer was the on-ramp to options. This module makes that bridge explicit and previews the road ahead: the Greeks (including vega, the sensitivity to implied volatility), implied volatility and pricing, ES/SPX specifics, strategies, and options risk. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson
OB18

OB18 — Capstone: Your Options Foundation

This capstone ties the whole book together: what an option is; calls and puts; the four basic positions; the anatomy (strike, expiration, moneyness, premium); how buyers and sellers profit and lose; exercise, assignment, and expiration outcomes; the option chain; payoff diagrams; why people trade options; the real risks; and the volatility bridge. You now have a true foundation in options — and the discipline to respect their risk. The road ahead runs through the rest of the options vertical. Options carry real risk; education, not financial advice.

$930-day lesson accessOpen lesson