Options educational content provided courtesy of ChartBender.
A Reminder
We ran this issue before, but its message is timeless.
Why do you want to trade options? Are you in pursuit of prodigious profits? If avarice brought you here, large-scale failure will surely send you back. Replace any greed with applied intellect and you can have a healthy, long-term relationship with the options markets.
Based on my experience in this industry, many more retail traders could succeed than do. The reason has little to do with the inherent properties of option contracts. Instead, it is because investors refuse to take the time to learn what is necessary before jumping into the game. Worse still, many who make an effort to learn think that everything they need to understand can be obtained somewhere on the web for free. These people end up paying the market directly for their education. But they incur another cost by paying this way: the emotional scars of defeat that impair their future decisions.
You've got to be serious about learning options before you can be serious about trading them.
Do you know what the "mark" is? It's the price exactly between the bid price and the ask price of a security. It is also known as "fair value". A retail trader normally cannot buy and sell at the mark. He must buy above the mark and sell below the mark. Let me put it to you like this, partner: The retail trader must buy and sell at an UNFAIR value. And, in the retail trader's case, this constitutes an unfair DISadvantage.
Most people refer, euphemistically, to the bid/ask spread as "the cost of doing business". But to really come to grips with the situation, accept that you are necessarily being treated unfairly. Why necessarily? Because if the market makers did not have an unfair advantage, they would not come to work. If they did not come to work, there would be virtually no liquidity in the markets. If there was no liquidity in the markets, nobody would be investing or trading at all.
The market makers' advantage is your disadvantage. Imagine two boxers. One with gloves and one without. You, with your big, puffy gloves, have more risk and less potent attacks.
So how do you win in an arena that guarantees you'll always be fighting with an unfair disadvantage? You become a smarter fighter by learning vigorously. The options market is not a place for he who leaps before looking. One who does will find the landing to be not unlike a bed of jagged rocks. However, for the committed student, options will be quite rewarding.
Without question, if you take the time to learn options, you will have taken an enormous step toward financial literacy in general. It is guaranteed that you will be smarter with money in every respect; and that, my friends, is worth the price of admission whether or not you ever actually buy or sell a single contract.
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This is not a solicitation or recommendation to buy any securities, options or financial instruments of any type. Any information in this email is for educational purposes only.
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A Reminder 
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