What you’ll take away
- An option is a promise with a deadline. Four words describe every one of them: what, at what price, by when, and who owes whom.
- This app only ever suggests the paid-up-front side of that promise. You get cash today and take on an obligation.
- The obligation is to buy a stock you already wanted, at a price below today’s — or to sell shares you own at a price above today’s.
- You will be able to read a real scan result, out loud, as a sentence. That is the actual goal of this lesson.
Forget options for a minute. Think about a deposit.
You want to buy a used car. The one you like is $10,000, which feels steep — you’d happily pay $9,000. So you say to the dealer: here’s the deal. I’ll commit, in writing, to buying this car for $9,000 any time in the next month, if you decide you want to sell it to me at that price. For agreeing to stand by that, pay me $200 today.
The dealer takes it, because a guaranteed buyer at $9,000 is worth something to them. Now walk through what can happen.
The car holds its value. The dealer never asks you to buy — why sell at $9,000 what they can get $10,000 for? The month ends, the agreement evaporates, and you keep the $200 for doing nothing at all.
The market for used cars collapses. That car is now worth $7,500, and the dealer absolutely holds you to it: you pay $9,000 for a car worth $7,500. You’re down $1,500 on the car, but you were paid $200 up front, so you’re really down $1,300. And you do own the car you wanted — just at a worse price than you could get today.
That is a cash-secured put. The entire thing. Swap the car for 100 shares of a company, the dealer for whoever’s on the other side of the market, and the $200 for an option premium, and you have understood the trade this app spends most of its time looking for.
The one word that trips everyone up
“Selling” an option sounds like you must own something first. You don’t. Selling here means creating the promise and being paid for it — you are the dealer’s counterparty, the one who took $200 to be on the hook. The word for the other side, the one who pays for the right to decide, is “buying”. This app is almost entirely about the paid side.
The four words
Every option contract, without exception, is fully described by four things. Real option quotes look intimidating because they compress all four into a line of symbols, not because there is a fifth hiding somewhere.
What
100 shares of one company
Always 100, which is the single most common source of sticker shock. A price quoted as “$1.50” means $150 of real money, because the quote is per share and the contract covers a hundred of them. Every dollar figure on the scan screens is already multiplied out for you.
At what price
The strike
The share price written into the agreement — $9,000 for the car. It never moves, no matter what the stock does. That fixedness is the only reason the contract is worth anything to anybody.
By when
The expiration date
The day the promise stops existing. Before it, anything can happen. After it, the contract is either done or it was never used and is now worth exactly nothing — which, as the paid side, is the outcome you are hoping for.
Who owes whom
Put or call
A put is about someone being able to sell shares to you at the strike. A call is about someone being able to buy shares from you at the strike. If you sold the put, you may have to buy. If you sold the call, you may have to sell. That’s the whole distinction.
Two of those four are yours to choose, and choosing them is the only real decision in this style of trading. A lower strike is a safer promise that pays less. A further-out deadline pays more and ties up your money longer. Everything the scanner does is search that trade-off for the best available combination.
What the money actually looks like
This is the part no diagram ever makes obvious, so here it is in numbers. Illustrative numbers — not a live quote.
A stock trades at $100. You promise to buy 100 shares at $95, any time in the next five weeks, and you’re paid $200 for the promise.
| If the stock ends at | Do you buy the shares? | Your result |
|---|---|---|
| $110 (up) | No | +$200 |
| $100 (flat) | No | +$200 |
| $96 (down a little) | No | +$200 |
| $95 (right at your price) | Maybe | +$200 |
| $93 (below your price) | Yes, at $95 | +$0 |
| $90 | Yes, at $95 | −$300 |
| $75 (bad news) | Yes, at $95 | −$1,800 |
Four of the seven outcomes pay you the same $200. That is what people mean when they call this a high-probability strategy — and the last row is why a high probability is not the same as a good bet.
Three things in that table are worth saying out loud, because they are the three things beginners get wrong.
Your best case is fixed. $200 is the most this trade can ever make. Not $200 if things go well and more if they go brilliantly — $200, full stop, whether the stock rises 2% or 40%. You sold certainty and you got paid a certain amount for it.
Your worst case is not fixed. It gets worse all the way down to the stock being worth zero, where you’d have paid $9,500 for something worth nothing. Unlikely, not impossible. The shape — small fixed gain, large variable loss — is the entire risk of this strategy, and no amount of good trade selection changes the shape.
The turning point is $93, not $95. The $200 you were paid absorbs the first $2 per share of trouble. That price is the breakeven, and it is always a little better than your strike, by exactly the premium.
The whole trade in one picture: your best case is a flat line, your worst case is a slope with no floor. Probability of profit only measures how often you land in the green zone — it says nothing about how far down the red one goes.
“Where does the money come from?”
Cash to cover the promise. To sell that $95 put, your broker requires you to have $9,500 sitting there — 100 shares at $95 — untouched until the contract expires. That is what “ cash-secured” means, and it is why the return figures on the scan screens look modest: $200 earned on $9,500 committed, not on $200 risked. Any site quoting you a triple-digit return on a trade like this is dividing by the wrong number.
Now read a real result
Here is what the scanner shows, and here is the same thing as an English sentence. Once you can do this translation, the interface stops being a wall of jargon.
SELL PUT — XYZ $95 Strike | Exp: 2026-11-20 (35 days) | 88% modeled chance it expires worthless
| On screen | What it means |
|---|---|
| SELL PUT | You take the paid side of a promise to buy shares. Cash now, obligation later. |
| $95 Strike | The fixed price you’d pay per share, if it comes to that. |
| 35 days | How long the promise stands. Sometimes written DTE, for days to expiration. |
| 88% modeled chance | A pricing model’s estimate that this expires unused. An estimate from a model, not a record of past results — the distinction matters enormously and the next lesson is about it. |
| Premium $2.00 | Per share. So $200 in your account, today. |
| Capital required $9,500 | Cash frozen until expiry. Not a fee — you get it back, you just can’t spend it meanwhile. |
| Delta 0.25 | Roughly how much the contract’s price moves per $1 of share price, and loosely a 25% chance of ending up on the wrong side of $95. |
| Breakeven $93.00 | Below this, you’re genuinely losing money. |
| Liquidity: Good | Enough people trade this contract that you can get in and out near the price shown. Thin means you might not. |
Read aloud: “I’m being paid $200 today to promise that if XYZ falls below $95 in the next 35 days, I’ll buy 100 shares at $95. That freezes $9,500 of my cash until 20 November. I start actually losing money below $93.”
That sentence is the trade. Every other number on the screen is there to help you judge whether it’s a good one — none of them changes what you would be agreeing to.
The four mistakes that cost beginners the most
Not in order of how often they’re made, but of how much they cost.
1. Picking a strike you don’t actually want to own the stock at. The promise is real. If you would be unhappy owning 100 shares of this company at the strike price, you have chosen the wrong strike — or the wrong company. This single check eliminates most bad outcomes in this strategy, and it requires no maths at all.
2. Reading the win rate as the whole story. An 88% chance of making $200 sits next to a 12% chance of losing far more than $200. Whether that’s a good bet depends on the size of the loss, not just the frequency. This is the most important idea in the whole library and it gets its own lesson, immediately after this one.
3. Committing too much to one name. $9,500 frozen per contract adds up fast, and the losses in this strategy tend to arrive on the same day across every position, because that is what a market-wide selloff is. The scanner suggests a size for this reason; it is deliberately smaller than you’ll want it to be.
4. Selling options that barely trade. A contract with almost no activity shows a tempting price that nobody will actually give you, and worse, that you can’t escape when you want out. That is what the Liquidity reading on every result is protecting you from, and why some scans come back empty rather than showing you something unfillable.
Before real money, two suggestions
Write the sentence down. For any trade you’re considering, write the read-aloud version by hand. If you can’t complete it, you don’t yet know what you’re agreeing to — and that is information, not failure.
Then paper-trade a few. Most brokers offer a practice account. The mechanics of placing one of these orders — sell to open, limit price, buy to close — are fiddly the first three times and forgettable afterwards. Learn them on fake money.
What this lesson deliberately simplified
Stated plainly, so you don’t discover it later and wonder what else was glossed over.
- Assignment can come early. On individual company shares, the other side can exercise their right before the deadline, not only at it. It usually doesn’t happen unless the contract is deep in the money or a dividend is due, but “by the deadline” is the honest version, not “on” it.
- Where the 88% comes from matters. It is a model output, not a count of past trades. Different assumptions give a different number, and the model does not know about the lawsuit filed this morning — the lesson on where the percentage comes from shows you the actual picture behind it.
- Tax treatment is genuinely awkward. Premium income is usually taxed at the least favourable rate available, which is why every return in this app is shown after tax — an unusual choice worth one lesson of its own.
- There are far more option strategies than these two. Spreads, calendars, ratios. This app concentrates on the two where the obligation is easy to state and easy to cover, which is also why they are where a beginner should start.
Where to go next
You now have enough to read every screen in this app literally. The next lesson is the one that decides whether you use it well: why a 92% win rate can still lose you money. It is five minutes and it is the reason this tool exists.
If you’d rather see the thing working first, run a scan on a company you know and try reading the result out loud as a sentence. Any word that stops you has a dotted underline — tap it.
Educational content, not investment advice. Options involve risk of loss, including losses substantially greater than the premium received, and are not suitable for every investor. The examples here use round illustrative numbers, not live quotes. Nothing on this page is a recommendation to enter any particular trade.
Next lesson
2. Cash or margin: what the trade actually ties upEvery trade freezes money you can't use elsewhere. Whether that's the whole amount or a deposit your broker can raise mid-trade is the part nobody explains.Educational information only — not investment, tax, or legal advice. Nest Money is not a registered investment adviser or broker-dealer. Every figure and diagram in this lesson is illustrative. Options involve substantial risk of loss, including loss greater than the premium collected.