There are four ways to trade options: buying a call, buying a put, selling a covered call, or selling a cash-secured put. Each one serves a different purpose, but the process to place them is the same.

Buying gives you a right: to buy (call) or sell (put) the stock at the strike, by paying a premium. Selling commits you to something: delivering your shares (covered call) or buying them (cash-secured put) if you're assigned, in exchange for collecting a premium. To sell, you need the corresponding backing, either the shares or the cash.

Step by step

1. Go to the stock you want to trade and tap Trade.
2. In the menu that opens, tap Trade options. You'll also see Buy stock and Sell stock there, in case you'd rather trade the stock directly instead of an options contract.
3. In the contract list, choose the expiration date from the ones available.
4. Select Buy or Sell, and Call or Put, in the selectors.
5. Choose the strike you prefer.
6. Tap the Buy call or Sell put button, depending on your choice.
7. Set your limit price, using the Bid and Ask as a reference, and enter the number of contracts. Keep in mind that 1 contract equals 100 shares. Tap the button to continue.
8. Review the order summary. If you're selling, confirm you have the necessary backing: 100 shares per contract for a call, or enough cash for a put. Tap Confirm order.
9. You'll see a confirmation screen showing your order was received.

What you can see in the contract details

Before you confirm, each contract shows you reference information to help you decide: the premium, the breakeven, the probability of finishing in the money (meaning the contract would already have value if you exercised it today), and a chart of expected profit or loss based on the price at expiry. You'll also see the Bid, the Ask, the mark price, the previous close, and the trading volume. In the final order summary, along with the limit price and number of contracts, you'll see the premium, the fee, and the estimated total.

Your order stays pending until the price reaches your limit or until market close the same day. You'll get a notification when it fills. If availability at the price you chose is limited, your order may only fill partially.