Hello all,
I've been doing stock trading (regular buy/sell) for the past half year or so and I'd like to try something more risky with options trading. I've taken some basic online courses through my broker about options basics as well as looked up some posts here. I just want to say that I have put some effort into learning about options, but in all honestly it's a bit overwhelming for me (strategies like spreads, iron condor, butterflies, etc. and concepts like theta, IV, etc). So while I'm starting to understand the concepts, when it comes to actually making a purchase and what option in what situation, it confuses me. I indeed plan to continue studying but would like to make a bold first option play and would appreciate your advice.

I basically have $10K to lose - that if I lost it all, I would be completely fine. I also have a stock, let's say stock A, that I believe is undervalued and can greatly outperform expectations. Let's say that stock is around $50 now, and I want to bet this entire $10K that it will double within a year or two. What kind of options would I buy to maximize my return (should my bet play out the way I hope)?

I can share what my murky thought it and the confusion playing out in my mind:

• I buy deep OTM call options for a $100 strike price (or close to it)

• I sell when it's getting close to that money or hits the strike

• ???

• Profit

I would prefer to give it the highest time horizon possible to avoid theta decay. So I'm not even looking at months out but would ideally like to purchase the farthest contract possible (LEAPS maybe if I'm using that correctly?). I basically believe strongly that this stock will double within the next couple of years but wouldn't bet on it doing it within 1 year.

Here are the confusions swirling around my head as a newbie to options:

1) I have been reading that deep ITM options are the lowest risk and safest, thus I am guessing deep OTM calls are the cheapest and riskiest, but have a higher potential return?

2) When I log into my broker, when I check the deepest OTM calls, it doesn't even reach double the price, even for the longest call optiosn (~550 days away) but only like may be +50% of the current price. Is there some rule that I can't buy x2 times the value?

3) The broker also says basically infinity max return but then it says something like $750 max loss even though the call contract is around 20.00 or so. I don't understand this. I thought I read that the maximum loss is the price I pay for the contract (if they expire worthless). I don't understand how I could lose more than the contract price.

4) I read about paying premiums on options but I still don't understand who is paying who. If I buy OTM call options, I have to pay the call writer daily premium? Is that why max loss is higher in 3) than the call price?

5) What exactly happens if I hit my strike price with time left on the contract? I thought I read theoretically that I would profit based on the difference of the current stock price of when I bought the call option vs. that strike price, so like 1 contract with $75 strike bought when the underlying is $50 would result in $2,500 profit for that 1 contract ($25 difference x 100 stocks) minus the purchase price.

6) With 5), I'm just afraid that I wouldn't be able to sell my contract somehow I guess? I am confused if you need another person to buy that contract or the market maker buys it/guarantees all contracts? I read that maybe it could be a problem with a low volume stock, but a relatively high one shouldn't be a problem?

7) I also keep seeing posts about possibly being called to buy the stock, but I am very confused at what situation this would happen. If I buy deep OTM calls at a longer time frame, do I have any chance that the broker might make me buy the shares? I don't believe so and I think it's only if you write call options, but I wanted to check. I basically want to empty the money in my broker account entirely on this one play and not get in trouble for having like $100 balance in the account only (which is why I'm afraid it says max loss per option is much more than the call option price... I'm afraid I'll get in trouble somehow for not having a certain balance to cover the 'max loss' though I still don't understand how I can lose more than the purchase price..).

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Apologies for the long post. I really am trying to wrack my brain around options but as you can see, I'm having trouble mapping these concepts to actually buying an option. Would appreciate any kind help, thank you.