Start from Zero
Fifteen tiny lessons. One idea each. Every new word is explained right where it shows up. Read one a day, or a few at a time. There is no rush.
Lesson 1 of 15
Lesson 1: Investing vs Trading
In one line: Investing means buying something and holding it a long time, while trading means buying and selling fast to try to catch quick price moves.
Picture it: Investing is planting a tree and waiting years for it to grow. Trading is buying a toy at a yard sale in the morning and trying to sell it for more by lunch.
Why it matters to you: Day trading SPX is the fast kind, not the slow kind. You should know that fast trading is very risky and can lose money quickly.
New words: invest = put money into something and wait for it to grow; trade = buy and sell quickly; day trading = buying and selling on the same day.
You now know: Trading is fast and risky. Investing is slow.
Source: Investor.gov, "Day Trading," https://www.investor.gov/introduction-investing/investing-basics/glossary/day-trading
Lesson 2 of 15
Lesson 2: What the Stock Market Is
In one line: The stock market is a big place where people buy and sell tiny pieces of companies.
Picture it: Think of a giant farmers market. But instead of selling apples and bread, people are selling small pieces of companies, and prices go up and down all day.
Why it matters to you: Every trade you will ever make happens inside this market. It is the field you will be playing on.
New words: stock market = the place where pieces of companies are bought and sold; exchange = an organized spot where this trading happens.
You now know: The stock market is where pieces of companies change hands.
Source: Investor.gov, "Stock Market," https://www.investor.gov/introduction-investing/investing-basics/glossary/stock-market
Lesson 3 of 15
Lesson 3: What a Stock or Share Is
In one line: A stock, also called a share, is one tiny piece of owning a company.
Picture it: Imagine a pizza cut into a million slices. If you own one slice, you own a tiny part of the whole pizza. A share is one slice of a company.
Why it matters to you: Stocks are the most basic building block. You need to know what a share is before you learn harder things later.
New words: stock = a piece of owning a company; share = one single piece of that stock; own = to have a part of something.
You now know: A share means you own a tiny piece of a company.
Source: Investor.gov, "Stock," https://www.investor.gov/introduction-investing/investing-basics/glossary/stock
Lesson 4 of 15
Lesson 4: What an Index and the S&P 500 Are
In one line: An index is like a scoreboard that adds up how a group of companies is doing, and the S&P 500 is the scoreboard for 500 big US companies.
Picture it: Think of one report card grade that mixes 500 students into one number. If the group does well, the number goes up. That number is the index.
Why it matters to you: "SPX" is the name for the S&P 500 scoreboard. The thing you want to trade is tied to this number, so you must know what it is.
New words: index = a number that shows how a group of stocks is doing; S&P 500 = the scoreboard for 500 large US companies; SPX = the short name for that scoreboard.
You now know: SPX is a scoreboard for 500 big US companies.
Source: Investor.gov, "Market Index," https://www.investor.gov/introduction-investing/investing-basics/glossary/market-index
Lesson 5 of 15
Lesson 5: What a Broker Is
In one line: A broker is the company or app that lets you buy and sell, and it holds your money for you.
Picture it: A broker is like the cashier at a store. You cannot grab things off the shelf yourself. The cashier takes your order and rings it up.
Why it matters to you: You cannot trade without a broker. Schwab is a big broker company, and thinkorswim is the trading app that Schwab gives you to place trades.
New words: broker = a company that buys and sells for you and holds your money; brokerage account = the account where your money and trades live; Schwab = a broker company; thinkorswim = Schwab's trading app.
You now know: A broker like Schwab is how you buy and sell, using an app like thinkorswim.
Source: Investor.gov, "Broker," https://www.investor.gov/introduction-investing/investing-basics/glossary/broker
Lesson 6 of 15
Lesson 6: Buy, Sell, and What a Position Is
In one line: When you buy, you get something; when you sell, you give it away for money; a position is the thing you are holding right now.
Picture it: You buy a baseball card. While it sits in your pocket, that is your "position." When you sell it, the position is gone.
Why it matters to you: Every trade is a buy and later a sell. Knowing if you "have a position" tells you if you are still in the game or already out.
New words: buy = give money to get something; sell = give the something back to get money; position = a trade you are holding right now.
You now know: A position is just what you hold until you sell it.
Source: FINRA, "Buying and Selling," https://www.finra.org/investors/investing/investing-basics/buying-and-selling
Lesson 7 of 15
Lesson 7: Price Charts and Candles
In one line: A price chart is a picture that shows how the price of a thing moved up and down over time.
Picture it: Think of marking your height on a wall each year. The marks make a picture of how you grew. A chart does that for price.
Why it matters to you: Traders read charts to see what price did. Each "candle" is a small block that shows the price for one chunk of time, like one minute or one day.
New words: price = how much money one thing costs right now; chart = a picture of price over time; candle = one block on the chart showing price for one time chunk.
You now know: A chart is price drawn over time, and candles are its building blocks.
Source: SEC Investor.gov, "Stocks," https://www.investor.gov/introduction-investing/investing-basics/investment-products/stocks
Lesson 8 of 15
Lesson 8: Bid, Ask, and the Spread
In one line: The bid is the price someone will pay you, the ask is the price someone will sell to you, and the spread is the gap between them, which costs you money.
Picture it: At a fair, a booth will sell you a toy for 10 dollars but only buy it back for 8 dollars. That 2 dollar gap is the spread. You lose it just by trading.
Why it matters to you: You almost always buy at the higher ask and sell at the lower bid. The spread is a hidden cost on every trade, so a big spread eats your money fast.
New words: bid = the price someone will buy from you; ask = the price someone will sell to you; spread = the gap between bid and ask, which is a cost to you.
You now know: The spread is a cost you pay every time you trade.
Source: FINRA, "Understanding Order Types," https://www.finra.org/investors/investing/investing-basics/understanding-order-types
Lesson 9 of 15
Lesson 9: Risk and How You Can Lose It All
In one line: Risk means a trade can go against you, and in some trades you can lose every dollar you put in.
Picture it: Imagine betting your 5 dollars of lunch money on a coin flip. If it lands wrong, the 5 dollars is just gone. Some trades work like that.
Why it matters to you: This is the honest part. Most people who day trade lose money, and many lose all of it. Day trading is much riskier than slow, long term investing, so go in knowing you can lose what you put in.
New words: risk = the chance a trade loses money; day trade = buying and selling fast, often in the same day; lose it all = the whole amount in that trade goes to zero.
You now know: Day trading is high risk, and most day traders lose money.
Source: SEC, "Day Trading: Your Dollars at Risk," https://www.sec.gov/files/daytrading.pdf
Lesson 10 of 15
Lesson 10: The One Survival Rule
In one line: Only risk a small amount you can afford to lose on any one trade, and never put your whole account on one trade.
Picture it: If you have ten cookies, you do not eat all ten in one bite. You take one small bite at a time so you never run out at once.
Why it matters to you: This rule keeps you in the game. If one trade goes to zero, a small bet only stings. Betting your whole account can wipe you out in one move, so beginners protect the account first.
New words: account = all the money you keep for trading in one place; afford to lose = money you can lose without hurting your real life; survival rule = a habit that keeps you from going broke.
You now know: Keep each trade small so one bad trade can never end you.
Source: FINRA, "Day-Trading Risk Disclosure Statement," https://www.finra.org/rules-guidance/rulebooks/finra-rules/2270
Lesson 11 of 15
Lesson 11: What an Option Is
In one line: An option is a deal that gives you the choice, but not the must, to buy or sell something at a set price before a set day.
Picture it: You put down 20 dollars to hold a video game at the store at today's price. You can come back and buy it later, or walk away and just lose the 20 dollars. You held the price, but you did not have to buy.
Why it matters to you: This is the whole game of options. You pay a small fee for a choice. If you never want to buy or sell, you do not have to.
New words: option = a deal that gives you a choice; set price = the agreed price; set day = the deadline.
You now know: An option is a paid choice, not a promise to act.
Source: SEC, "An Introduction to Options," https://www.sec.gov/oiea/investor-alerts-bulletins/ib_introductionoptions
Lesson 12 of 15
Lesson 12: A Call and a Put
In one line: A call is the choice to buy, and a put is the choice to sell.
Picture it: A call is like a ticket to BUY concert seats later at today's price. A put is like a ticket to SELL your seats later at today's price, even if nobody else wants them then.
Why it matters to you: These are the only two kinds of options. If you think a price will go up, people often buy calls. If you think a price will go down, people often buy puts. You can still lose what you paid either way.
New words: call = the choice to buy; put = the choice to sell.
You now know: Two options exist: a call to buy and a put to sell.
Source: OCC Options Education, "Options Basics," https://www.optionseducation.org/optionsoverview/options-basics
Lesson 13 of 15
Lesson 13: Strike, Premium, and Expiration
In one line: The strike is the set price, the premium is what you pay to get the option, and expiration is the deadline.
Picture it: The strike is the price written on your game hold slip. The premium is the 20 dollars you handed over to hold it. Expiration is the day the slip stops working.
Why it matters to you: These three numbers shape every option. The premium is money you can lose. After expiration, your option is over and may be worth nothing.
New words: strike price = the set buy or sell price; premium = the cost you pay for the option; expiration = the day the option ends.
You now know: Every option has a strike, a premium, and an expiration.
Source: OCC Options Education, "What is an Option?", https://www.optionseducation.org/optionsoverview/what-is-an-option
Lesson 14 of 15
Lesson 14: What 0DTE Means
In one line: 0DTE means zero days to expiration, an option that ends on the same day you trade it.
Picture it: It is like a hold slip that expires tonight. By the time you go to bed, it either worked or it is trash. There is no tomorrow to fix it.
Why it matters to you: Because the time is so short, tiny price moves can swing the value fast. It is fast and very risky. You can lose all the money you paid in one day.
New words: 0DTE = zero days to expiration; volatile = price jumps around fast.
You now know: A 0DTE option lives and dies in one day, which makes it risky.
Source: OCC Options Education, "0DTE Options Primer," https://www.optionseducation.org/news/0dte-options-primer-what-investors-should-know-about-expiration-day-positions
Lesson 15 of 15
Lesson 15: Why Options Can Go to Zero
In one line: An option can become worth nothing, and beginners often lose the money they paid.
Picture it: Your hold slip says you can buy the game for 60 dollars. But the store now sells it for 40 dollars. Nobody wants your slip. When it expires, it is just paper. The 20 dollars you paid is gone.
Why it matters to you: This is the honest truth. An option can expire worthless. You can lose everything you paid for it. No option promises money, income, or getting rich.
New words: expire worthless = end with no value; lose = the money you paid does not come back.
You now know: Options can go to zero, so only risk money you can afford to lose.
Source: OCC Options Education, "0DTE Options Primer," https://www.optionseducation.org/news/0dte-options-primer-what-investors-should-know-about-expiration-day-positions