Hey, my Muddy. 😏

Let's talk about Apple
(We're using fake numbers for simplicity).

Companies have stocks and stock options (contracts). In theory, you are buying 1/X amount of shares that all together add up to the total company 'worth'. But honestly, whatever—who cares. A share is a bit of a company. Cool.

The Stock (The Expensive Way)

Let's say Apple is at $100. This means that if I want 100 shares, I need $10,000 in cash.

The Option (The Contract)

This is where stock options come into play. An option is a contract giving you the right to buy 100 shares at a set price, by a set date, for a set cost.

Contract Expiration

The set date your contract expires. You have until this day to make your move.

The Contract Cost

So, 1 Apple stock option is the same as 100 Apple shares, and costs $900. We're just comparing a sample contract cost vs. actual ownership here.

The Breakdown

If Apple goes up a dollar, either way, you make $100 because you're dealing with 100 shares. You just get to make the money with $900 instead of $10,000 by using options. This is literally the Wall Street secret, LMAO.