Imagine you have a ticket that lets you buy 1 share of Apple stock for $150 anytime in the next month – no matter what the actual price of the stock is 🎟️

That’s what a stock option is!

Options are special tickets that let you buy or sell a stock at a certain price in the future 📄

If Apple’s stock price goes up to $200 / share, you can use your ticket to buy it for $150 and immediately sell it for $200, making a profit of $50 📈

💡This is called exercising an option.

But if Apple’s stock price stays below $150 / share, your ticket will become worthless since you wouldn’t make a profit if you bought the stock for $150 and sold it for less than that 🎟️

Exercising options is not the only way to make money from them: you can also sell your option to someone else – just like you buy and sell stocks!

But watch out: unlike stocks, every option has an expiration date, so if you don’t exercise your option or sell it to someone else before the expiration date, it’ll become worthless 😨

Options are one of the riskiest assets out there, and around 90% of retail option traders lose money on options in the long term 📉

For this reason, Bloom doesn’t allow you to buy and sell options on our app, but this journey will teach you how options work and hopefully help you understand their risks 🛡️