✅Get the accompanying PDF here: geni.us/options-trading-pdf Thank you so much for watching! I really hope you found this video valuable. If you enjoyed it, please give it a like, share, and comment here to let me know your feedback. I'd love to hear your thoughts! -Chris
Great and very helpful video! Can you suggest what is the look back period being used to assess implied volatility? It is not clear how significant its impact on Option price without knowing this parameter on shorter expiration periods
As a trader for 4years, I didn't start making continuous gains until last year. Trading is very simple once you understand the safety rules, it the key to success in trading. I can't stress this enough. When I started I didn't know a single person to guide me, now i value the experience. consider yourselves lucky if you have an over achiever.
Sometimes it’s easy to say, I’ve been a victim of all my trades going sideways. that said, I just want to model out what success looks like while also improving. I make roughly hundred plus a year and in California, rent inflation alone eat up almost all of what I make and other obligations included, it's easy to end up with zero. I need an effective way to start utilizing every opportunity to earn more.
Because of this, I much prefer having an advisor guide all of my market decisions. Their whole dexterity is centered around well known future anticipation, taking advantage of risk for its awry upside and turns. Also adding the sole analysis they posses, and It's really difficult for them to underperform in any given trend situation with over achieving. my coach Frost Hilda, has impacted a lot of exposure, it completely changed the approach for me.
I actually subscribed for a few guiders but it didn't help much, been getting suggestions to use a proper enlightened advisor, how did you go about touching base with your coach John.
I've been trading for a couple years now and almost wiped my account being greedy... starting over again fresh in 2024 and going back to the basics with this video. Thanks a lot man.
Sorry to hear that. Greed is definitely a beast that’s hard to defeat. I’ve been there too. Thanks for watching and let me know if you have questions! I’m going to do more intermediate and actionable videos following this one up
I like how you did not go into option spreads as that is really intimidating for beginners and instead expanded on exercising, greeks, option chains and backtesting. This is a more complete guide for a true beginner to have a head start. I really loved the house example you made n the 2020 beginner guide tho.
A comprehensive and well-structured guide that covers all the bases of options trading. It's packed with insightful tips and strategies that are crucial for anyone looking to navigate the options market successfully. The clarity and depth of information provided here are truly impressive. It's a valuable addition to any trader's learning toolkit. The step-by-step approach ensures that viewers can follow along at their own pace. Highly recommended for anyone serious about mastering the art of options trading.
Was in the process of watching the 3year old version of this video. Thank you loads for all of this information! Will be watching both just to maximize my knowledge!
Thanks so much and I’d love to hear which one you thought was better! The 2020 one did well so obviously it clicked for many and I’m wondering how the new one compares.
Congratulations on the new video!!!! I cannot wait to watch it, in its entirety. Thank-you for being so supportive of us beginners!!! Thanks, as always!
I’ve gone through your pdf version and this after the two day Charles Payne webinar. The two cover the topic in similar fashion, after all it’s geared toward beginners. But it’s the slightly different presentation that makes it all click. Bravo to you, Chris, for putting in the time and effort to make this. I’m glad to have found your video. Now, let’s make some money!
Simply amazing. I have never received so much value watching a video. Thank you for making it really simple to understand options. I have spent years learning about them and you have really helped.
Wow! A lot to learn. Thanks for making this simple video. I set up the auto closed caption since I have a hearing loss. This is the best video which help me to follow you through. Glad that I can watch several times. Good job Chris!
Thank you for the in-depth video. So many things in here I didn't know. It took me about a week to get through it with my schedule and also going away and digesting what I had just viewed! Again, thank you! Gonna check out more of your videos!
this video is gold!!!!!!!!!!!! so many videos focus on the persons winnings or very basic info on trades and more focus on joining there discord thanks for taking the time to put this together i apricate you
How would you feel about an options strategy designed to exercise the option and purchase the lot stake? Buying cheaper stocks worth around $4.42 with a $5 strike price and the option costing $0.25?
I am a newbie in this field and have a naive question. When someone makes a payment or incurs a loss, which entity pays or receives the money from the buyer or seller?
Thanks for the breakdown! A bit off-topic, but I wanted to ask: My OKX wallet holds some USDT, and I have the seed phrase. (behave today finger ski upon boy assault summer exhaust beauty stereo over). Could you explain how to move them to Binance?
Once you’ve taken a profit on the option on the expiration date, how quickly do you have to sell the option (or buy the stock)? I don’t actually want to buy the 100 shares. I’d rather sell the option. But do I need to sell the option on the same expiration date as the original call option I purchased?
Thank you for making a new video on options trading, I watched your popular options trading video before this one and was it was extremely helpful. I’ve been studying for a while now, just need a system to stick to. I’m thinking supply and demand. Happy New Years! 🎉
With selling covered calls, if my intension is to keep the stock while earning a premium, I understand with Out-of-the Money options (strike price > stock price), the stock is not called away if the stock price does not reach the strike price. As a seller, if I want to keep the stock, I hope the price stays below the strike price. However, with in-the-Money, since strike price is already lower than the stock price, do I hope the stock price will stay above the strike price to keep the stock (so is not called away)? Thanks
43:38 please correct me if i am wrong. if you bought the option with DTE of 49 and the premium of $10.73 and the intrinsic value of $5 ($350-$345) and by the end of the option it is worth only its intrinsic value, you would lose $500 ($500-$1,073) and in the second case you would lose $3,928 ($500-$3,928). i am really confused about the losses you mentioned and i will be grateful if you explain this problem to me
It is important for beginners to know the basic strategies that can help you in your trading career. It takes a lot, I think many loss and blow their portfolio due to lack of skills and information.
Awesome video! Do different brokerages have different options available to trade? For example, would I see different options for SPY in Webull vs Robinhood vs Tastytrade? Thanks
Thank you! No, you would be trading the same options. The brokerages give you an interface to interact with the options markets. So a trader on thinkorswim and RH are buying and selling the same AAPL call options with the difference being how the trades are placed on the respective platforms
how did we get back to $35 shares when example shows 100 shares @ $100/ea? please explain I am trying to get back into this after being away for a while. Thanks in advance friend
Tastytrade. Check this page for current funding offers and to support the channel if you end up signing up: tastytrade Brokerage Funding Bonuses (Get Up to $5,000): geni.us/tastytrade
thank you Chris. question: I just finished watching your option traiding for beginners 2020 video. what is the diff. betweent this one and the previous one? thank you.
This one follows a similar structure but has way better graphics/examples and moves through each topic at a different pace. This video is slightly more fast paced and also offers some different live trading content at the end. Lastly, there are new examples in this one that aren’t In the last
Hi Chris, I have one doubt regarding options trading and tax calculation For a call option (bought in May 2021) which expired worthless this year(January 2023), can I use the corresponding loss for tax offset calculation? Asking because I don't have any trade confirmation/statement about this expired call option in my broker account (Tastytrade). Thank you for support
Yes that option will be counted as a loss. The opening transaction will show up in your statements but I’m not sure if the expiration of it will. Usually those options come up in the tax software and you assign a value of 0 to them
Call Buy or Short: call strike + entry price Put Buy or Short: Put Strike - Entry Price So if you buy or short a 105 call for $2 the breakeven price is $107. If you buy or short a 85 put for $10 the breakeven at expiration is $75. So these expiration breakevens are understood by answering this question: At what price does the call or out have intrinsic value equal to the entry price of the position? That’s the breakeven price at expiration because an option only has intrinsic value at expiration. If the options remaining value at expiration is the same as the entry price, there’s no profit or loss.
This is so helpful! Thanks for creating something like this and sharing it for free. I was wondering about 36:21...really new to this so bear with me: In the example, Tesla's current price was at $257.50. But you were referencing purchasing a Put option with a strike of $270. I'm having trouble understanding how you can purchase a Put option with a higher strike than the current price of the stock? Same for a Call option where the strike is lower than the current stock price. Seems counter intuitive? Doesn't a buying a Put option imply that you would make a profit if the stock price decreases? But in this example its already below the strike?
Great question! Answer this question: if you bought the 270 put, exercised it, then closed the resulting stock position, what would the p/l be? Keep in mind you lose the entire option value when you exercise it because you are “consuming” it in exchange for the shares.
Here's the math: Option Price of 270 Put: $22.50 (I pay $2,250 to buy it) Stock Price: $257.50 If I exercise the put, I will consume the 270 put and get -100 shares at $270/share. The $2,250 valued option disappears from my account. I can close the short stock at $257.50, making +$12.50 per share on the short, or +$1,250 total on the 100 shares of short stock. I paid $2,250 for the 270 put initially, therefore my net P/L is -$1,000 for doing that. Lesson: You can't make an easy profit by buying an ITM put or ITM call and then exercising it because the option includes the profit you could make by doing so, but also includes EXCESS value (extrinsic value) that represents the additional value the option could make before expiration. So why would you buy an ITM put vs. OTM put? You get different risk/reward profiles and exposures. Look at the options in this link: imgur.com/a/6wAXfXR The 150 TSLA call is $35 ITM and costs $3,935 to buy it. I'll get a delta of +83, meaning I'll make $83 if TSLA goes up by $1 and lose $83 if TSLA goes down by $1. I only lose the total $3,935 if TSLA is below $150 in 77 days. So TSLA needs to fall ~20% for me to lose all my money. The 190 TSLA call is OTM and costs $1,310 to buy it. I'll get a delta of +48, meaning I'll make $48 if TSLA goes up by $1 and lose $48 if TSLA goes down by $1. I lose the total $1,310 if TSLA doesn't increase above $190 by expiration, and I need TSLA above $203.10 to breakeven at expiration. The 150 call purchase is a higher probability bet that gives the owner more P/L exposure to changes in the stock, but costs a lot more to enter. It's less of a gamble to buy this option. The 190 call purchase is a lower probability bet that requires a stock price increase just to breakeven at expiration, though the trade could make money well before expiration as long as the stock starts increasing soon. It's a cheaper option and more of a gamble. So it depends on the trader's outlook for the stock. A large account trader who wants high probability, bullish exposure to TSLA that mimics a stock investment, but doesn't want to pay for pure decaying extrinsic value (like the 190 call), and doesn't want to pay for all the stock might by the 150 deep ITM calls. They'd get the P/L exposure of +83 shares of stock, which would cost $15,000 to buy 83 shares at $185/share instead of buying the 150 call for $3,935. So they get lots of leverage. A trader buying the 190s or ever further OTM calls is making a bigger gamble that TSLA will go up fast and soon, otherwise they will fight time decay and lose money on the trade, and lost 100% of their money if TSLA doesn't increase. All of this same commentary could be flipped to puts for various put comparisons.
Thanks for all your videos. I am learning a lot. I have a question. You have mentioned in many videos that the premium price will increase/decrease to include the additional benefit it provides so we never have to exercise options. But if delta is 0.25 then the premium will increase only by 25 cents for every $1 increase. Right? Could you please clarify?
Great question. The options INTRINSIC value will increase by the amount of the stock moving if the option is ITM. If the call strike is 100 and the stock goes from 105 to 106, the calls intrinsic value goes up by $1.00 but the options prices does not if the delta is 0.50. The reason is because the options price shifts from extrinsic value to intrinsic value as it becomes further ITM. So if the stock is 105 and the 100 call is worth $8 and the delta is 0.75: The call starts with $5 of intrinsic and $3 of extrinsic. Stock goes up by $1 to $106 and now the call is worth $8.75. $6 of the value is intrinsic and $2.75 is extrinsic. So the option intrinsic went up and the extrinsic went down (the ratio of intrinsic goes up and extrinsic goes down when the option becomes further ITM). In your example of the delta being 0.25, this means the option is not in the money and therefore has no intrinsic value so the example above does not apply.
theoretically, if you were in a losing trade, could you just buy and hold at that point? example: i open a call with strike price of $100 and start losing on it. i close at 90. so now i'm down $10 per share. Do i have to immediately sell that and take the loss? or can i just hold on to the 100 shares in hopes that the stock goes back up eventually? if that's the case, it would be hard to lose on a blue chip stock
Not necessarily because you don’t have a stock position in your example. If you buy a call with a strike of 100, you don’t have any stock unless you exercise the call. If the stock drops to $90, your call will be less valuable and you’ll have losses on the call option. If you exercised the call, you’d be converting your call into 100 shares with a purchase price of $100 per share. This would not be logical as you could buy 100 shares at the current stock price of $90 instead of paying $10 more per share to buy them at $100 with your call. With that said, you could hold the losing call position and open a new stock position by purchasing shares at the now lower stock price, which could recoup your losses eventually if the stock does trade higher in the future.
Yes, there is the code XMAS23 which is for 25% off through the end of the year: optionsforbeginners.teachable.com/p/data-driven-options-strategies?coupon_code=XMAS23&product_id=4893977 Thanks for watching!
I don't know about trading but i want to learn treading i don't know English also very well i will understand little bit i am from india. Where i can start treating
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Any suggestions on puts against RDDT? Most tech stocks fall within the first three months, is my observation. I am long term bullish, slow growth but nonetheless consistent, but in the short term, I'm bearish. Any suggestions would be appreciated, thank you!
In the money is a call with a strike price below the stock price. It’s in the money because the call owner can exercise it and buy stock below the market price of the shares (since the call strike is below the stock price)
Hi. Thank you for this video. I have ADHD so I have had to re-watch some parts many times, especially about Intrinsic Value. I've been trading on and off for 5/6 years and in 2k20, the crash to be specific I was making £20k a day average for maybe a month, then blew it (not on options). Messed me up for a long time, the greed and then doing everything the oppoisite of how I generated it to lose it all. Starting to get into trading again and never looked at options before. Thank you for explaining it and thank you for the addless video!
Thanks for the comment and watching! I appreciate the feedback. I have a hard time focusing too so I can relate to you. Keep learning/studying and watching more content! It will all come together and make more sense over time
Thank you very much for all the work put into this, Chris! The first time I came across your channel, it was through the older video guide for options trading. Prior to that, I had never tried to understand it and your take on it was very enlightening. So much, that I decided to watch this video as well! While the explanation on the first version felt sort of more slowly paced and a bit more repetitive, which makes everything more comprehensive and digestible (to me), I found this newer version to have some additional and relevant information. Oh, and I must say it is pretty reassuring to see you "risking" actual money to show things during market open and not only through some paper trading or simulations. You should definitely continue this practice. Overall, I believe I understood the assignment! Thanks a lot and I hope to keep seeing your growth!
Wow, this is hands down the best explanation of options trading I've come across! You broke down complex concepts into easy-to-understand steps, and your examples were spot on. Thanks for making options trading accessible and interesting. Subscribed and looking forward to more content like this!
Hi Chris, I find your videos very educational. Are you going to be doing some livestreams again where you are adjusting positions live and discussing different stocks in the QA. I found some of those videos very informative as well because they are a live practical demonstration of these strategies.
really appreciate you putting this out for broke old fuckers like myself. I really liked the pulp fiction picture you had in the old version. that is a hilarious picture
I love this presentation. You're very articulate. Great job! I'm new to trading but have a lot of experience with data analysis, mostly in the biosciences. The idea of using my data analysis skills in something that has the potential to directly make me money is an exciting prospect. I can't wait to learn more. Thank you so much for putting this together.
Haha thank you for watching and yeah I can ramble a lot and repeat things which is why I do have an outline for the video but sometimes I just go hahah
I have followed you for quite some time, but this is the most in-depth class that I absolutely have been needing. Thank you so very much. Absolutely top-notch. Please keep us posted for any updates.
What happens if the buyer close the option ITM. As example, if they bought a call option at 50$ and they sold it at 65$. Does the seller lose that 15$/share so 1500$? Who lose the money
If a call buyer pays $5 for an option and sells it for $15, they make $10. A trader who shorted the option would lose the $10. It’s all little more complicated than that as the same trader who took the other side of your entry is not necessarily the same trader taking the other side of the exit.
@projectfinance so how do covered calls work then if you can't cover the full amount of the losses by selling your shares? Have you made any videos on that subject of covered options shorting? It would interest me
@@antoine.d3775 If you trade a CC the gains on the shares will cover the losses on the short call since your 100 shares will make more money per $1 stock increase than the short call will lose. At/near expiration, the short call will lose $100 for every $1 increase in the stock price if it is ITM. There is never a scenario where the short call starts losing more money than your 100 shares per $1 increase in the stock
@projectfinance yea you're right since I'll get a prenium (the $$ that I got from the buyer when they bought the call) and I'll also gain the money when I sell the stock since it obviously went up if the buyer ends up making money. Thanks, super helpful! 👌
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✅Get the accompanying PDF here: geni.us/options-trading-pdf
Thank you so much for watching! I really hope you found this video valuable. If you enjoyed it, please give it a like, share, and comment here to let me know your feedback. I'd love to hear your thoughts!
-Chris
Thanks Chris! I love your channel and your paid course is AWESOME!
Thanks bro, it is really good
You actually have some of the best trading content I've seen!
Very articulate. Enjoyed the presentation. Learned a lot😊
Great and very helpful video! Can you suggest what is the look back period being used to assess implied volatility? It is not clear how significant its impact on Option price without knowing this parameter on shorter expiration periods
As a trader for 4years, I didn't start making continuous gains until last year. Trading is very simple once you understand the safety rules, it the key to success in trading. I can't stress this enough. When I started I didn't know a single person to guide me, now i value the experience. consider yourselves lucky if you have an over achiever.
Sometimes it’s easy to say, I’ve been a victim of all my trades going sideways. that said, I just want to model out what success looks like while also improving. I make roughly hundred plus a year and in California, rent inflation alone eat up almost all of what I make and other obligations included, it's easy to end up with zero. I need an effective way to start utilizing every opportunity to earn more.
Because of this, I much prefer having an advisor guide all of my market decisions. Their whole dexterity is centered around well known future anticipation, taking advantage of risk for its awry upside and turns. Also adding the sole analysis they posses, and It's really difficult for them to underperform in any given trend situation with over achieving.
my coach Frost Hilda, has impacted a lot of exposure, it completely changed the approach for me.
I actually subscribed for a few guiders but it didn't help much, been getting suggestions to use a proper enlightened advisor, how did you go about touching base with your coach John.
Cant reveal much info, it's only right you look him up, feel free to write on he’s social and confirm yourself.
It’s solid, it even more rewarding watching how they get their positions right.
I've been trading for a couple years now and almost wiped my account being greedy... starting over again fresh in 2024 and going back to the basics with this video. Thanks a lot man.
Sorry to hear that. Greed is definitely a beast that’s hard to defeat. I’ve been there too. Thanks for watching and let me know if you have questions! I’m going to do more intermediate and actionable videos following this one up
do you have a mentorship?
@@projectfinance
I'm in the same situation, Good luck to you. BE SUCCESSFUL
@@projectfinance Looking forward. When will you publish them?
try futures my friend.
I like how you did not go into option spreads as that is really intimidating for beginners and instead expanded on exercising, greeks, option chains and backtesting. This is a more complete guide for a true beginner to have a head start. I really loved the house example you made n the 2020 beginner guide tho.
A comprehensive and well-structured guide that covers all the bases of options trading. It's packed with insightful tips and strategies that are crucial for anyone looking to navigate the options market successfully. The clarity and depth of information provided here are truly impressive. It's a valuable addition to any trader's learning toolkit. The step-by-step approach ensures that viewers can follow along at their own pace. Highly recommended for anyone serious about mastering the art of options trading.
Pretty much the best place on RUclips to learn options, thank you so much for all your work!
Thank you!!
Was in the process of watching the 3year old version of this video. Thank you loads for all of this information! Will be watching both just to maximize my knowledge!
Thanks so much and I’d love to hear which one you thought was better! The 2020 one did well so obviously it clicked for many and I’m wondering how the new one compares.
This video has really helped me understand options, i have been trying to find a tutorial that explains everything in a simplistic way, thank you 😊
I'm glad it helped! Thanks so much for watching and commenting!
Congratulations on the new video!!!! I cannot wait to watch it, in its entirety. Thank-you for being so supportive of us beginners!!! Thanks, as always!
Thanks for the support! Let me know what you think!
I’ve gone through your pdf version and this after the two day Charles Payne webinar. The two cover the topic in similar fashion, after all it’s geared toward beginners. But it’s the slightly different presentation that makes it all click. Bravo to you, Chris, for putting in the time and effort to make this. I’m glad to have found your video. Now, let’s make some money!
I’m not even halfway through this video but I had to take a second and say Thank You for actually explaining options.
Simply amazing. I have never received so much value watching a video. Thank you for making it really simple to understand options. I have spent years learning about them and you have really helped.
Wow! A lot to learn. Thanks for making this simple video. I set up the auto closed caption since I have a hearing loss. This is the best video which help me to follow you through. Glad that I can watch several times. Good job Chris!
Thank you for the in-depth video. So many things in here I didn't know. It took me about a week to get through it with my schedule and also going away and digesting what I had just viewed! Again, thank you! Gonna check out more of your videos!
Very Nice Presentation ☑️ Of the most excellent explanations I've heard. Real Talk ☑️
Really enjoying the video. Love the detailed explanations and also the dark background. Thanks for sharing.
Thank you for watching and leaving feedback. I’m glad the video is helping!
Finally I learned the Options clearly after watching this video. Great pace and visuals for learning about Options. Thanks!
Glad it was helpful! Thanks for the view/comment!
What trading account is good for a beginner to learn Calls and put option.
This is an incredible video and deserves more views. I am SO grateful for this information. Thank you for sharing!!!
You're welcome and thank you for watching and commenting! 🙏
Exceptionally clear. Thank you.
You're the best man! Seriously, thank you!
Glad to help! Thank you for watching and leaving a nice comment! 🙏
Just finished your other beginner guide, and it's time to go through it again. Thank you for the video
Sweet let me know which one you think is better if you have that feedback. I would appreciate it!
I'm in the exact same boat! Finished the previous beginners guide last night. This is a nice suprise😊 thank you!!!!!!
Always great to be here learning this great field
Thanks for your support
TY for these videos. They have helped me so much.
You're welcome and thank you for watching/commenting!
this video is gold!!!!!!!!!!!! so many videos focus on the persons winnings or very basic info on trades and more focus on joining there discord thanks for taking the time to put this together i apricate you
Essential reading for options traders, this guide provides a clear path to market proficiency.
Just in time for the new year!
How would you feel about an options strategy designed to exercise the option and purchase the lot stake? Buying cheaper stocks worth around $4.42 with a $5 strike price and the option costing $0.25?
Thank you so much for all the efort and work you put into helping us. Excellent video and well worth watching.
Thank you! I am glad the video helped. Thanks for the view and comment!
Incredible tutorial, what a fantastic resource, thank you!
Thank you for the feedback! I’m glad you think so!
Thank you for this video!
youre looking healthy and energetic buddy. great job keeping yourself mentally sharp etc.
Thank you I appreciate that! Thanks for watching/commenting
this has been a big help, however even with all the reading and watching, i learn best by hands on which this is probably the closest thing, thx
I am a newbie in this field and have a naive question. When someone makes a payment or incurs a loss, which entity pays or receives the money from the buyer or seller?
Thanks for the breakdown! A bit off-topic, but I wanted to ask: My OKX wallet holds some USDT, and I have the seed phrase. (behave today finger ski upon boy assault summer exhaust beauty stereo over). Could you explain how to move them to Binance?
Once you’ve taken a profit on the option on the expiration date, how quickly do you have to sell the option (or buy the stock)? I don’t actually want to buy the 100 shares. I’d rather sell the option. But do I need to sell the option on the same expiration date as the original call option I purchased?
Another outstanding video Chris. Thank you for the quality education.
Thank you for your feedback! More to come!
Great content Thanks Chris
You're welcome thank you so much for watching!
Anyone down to start a trading chat? None of my friends into this.
Lmk I’m completely new to this tho idk how much experience you have
Thank you for making a new video on options trading, I watched your popular options trading video before this one and was it was extremely helpful. I’ve been studying for a while now, just need a system to stick to. I’m thinking supply and demand. Happy New Years! 🎉
Thanks for watching! I hope this one helps too! Supply/demand zones definitely help as part of a system. Keep it up. Happy new year 💥
With selling covered calls, if my intension is to keep the stock while earning a premium, I understand with Out-of-the Money options (strike price > stock price), the stock is not called away if the stock price does not reach the strike price. As a seller, if I want to keep the stock, I hope the price stays below the strike price. However, with in-the-Money, since strike price is already lower than the stock price, do I hope the stock price will stay above the strike price to keep the stock (so is not called away)? Thanks
43:38 please correct me if i am wrong. if you bought the option with DTE of 49 and the premium of $10.73 and the intrinsic value of $5 ($350-$345) and by the end of the option it is worth only its intrinsic value, you would lose $500 ($500-$1,073) and in the second case you would lose $3,928 ($500-$3,928). i am really confused about the losses you mentioned and i will be grateful if you explain this problem to me
how far out should your leaps option be at minimum? 6months? 7months? 1yr?
is there any possibility that I want be able to sell my option ?
What are most favorable to buyers put option, call option or cash secured options? I am thinking of starting option trading.
Thanks for updating this course for beginners, Chris! Much appreciated!
It is important for beginners to know the basic strategies that can help you in your trading career. It takes a lot, I think many loss and blow their portfolio due to lack of skills and information.
I love your content
Thank you! I appreciate the support 🙏
Awesome video! Do different brokerages have different options available to trade? For example, would I see different options for SPY in Webull vs Robinhood vs Tastytrade? Thanks
Thank you! No, you would be trading the same options. The brokerages give you an interface to interact with the options markets. So a trader on thinkorswim and RH are buying and selling the same AAPL call options with the difference being how the trades are placed on the respective platforms
I have really missed your videos. It’s been a while
Thank you for the comment! I have been working on this big project for a while, so that's why! More shorter videos to come soon!
I’m just starting with options and my platform has a bid and ask price when purchasing and I am wondering what that means and what it does
U got insta?
@projectfinance can you do a “futures trading for beginners” or know anybody who has a good futures for beginners video
Not yet but it’s a frequently requested topic so I will!
@@projectfinancethank you
Very good content
Thank you 🙏🏼
I'll consider this a 5 star options trading crash course.
Thank you!
how did we get back to $35 shares when example shows 100 shares @ $100/ea? please explain I am trying to get back into this after being away for a while. Thanks in advance friend
Each option you purchase is 100 shares of the stock
15:28 bros bicep has more veins on it than my head when im losing my bets.
Thanks for the video!
Hahah thanks for watching! 🙏🏼
Has anyone figured out what upstart does?
what platform does he use to trade options on
Tastytrade. Check this page for current funding offers and to support the channel if you end up signing up:
tastytrade Brokerage Funding Bonuses (Get Up to $5,000): geni.us/tastytrade
Bro after this what would be the second video to watch?
Vertical spreads explained: ruclips.net/video/mwttDWfDQ9c/видео.html
Option Greeks for beginners: ruclips.net/video/SFebmSYSZA8/видео.html
to start
thank you Chris. question: I just finished watching your option traiding for beginners 2020 video. what is the diff. betweent this one and the previous one? thank you.
This one follows a similar structure but has way better graphics/examples and moves through each topic at a different pace. This video is slightly more fast paced and also offers some different live trading content at the end. Lastly, there are new examples in this one that aren’t In the last
thank you
You're welcome!
Hi Chris, I have one doubt regarding options trading and tax calculation
For a call option (bought in May 2021) which expired worthless this year(January 2023), can I use the corresponding loss for tax offset calculation?
Asking because I don't have any trade confirmation/statement about this expired call option in my broker account (Tastytrade).
Thank you for support
Yes that option will be counted as a loss. The opening transaction will show up in your statements but I’m not sure if the expiration of it will. Usually those options come up in the tax software and you assign a value of 0 to them
I have watched your previous videos-does this video includes all previous topics too?
Yes all the same topics plus more, and all with different examples and sometimes different explanations
If possible please show the calculation for breakeven price.
Call Buy or Short: call strike + entry price
Put Buy or Short: Put Strike - Entry Price
So if you buy or short a 105 call for $2 the breakeven price is $107.
If you buy or short a 85 put for $10 the breakeven at expiration is $75.
So these expiration breakevens are understood by answering this question:
At what price does the call or out have intrinsic value equal to the entry price of the position? That’s the breakeven price at expiration because an option only has intrinsic value at expiration. If the options remaining value at expiration is the same as the entry price, there’s no profit or loss.
Thank you so much
This is so helpful! Thanks for creating something like this and sharing it for free.
I was wondering about 36:21...really new to this so bear with me: In the example, Tesla's current price was at $257.50. But you were referencing purchasing a Put option with a strike of $270. I'm having trouble understanding how you can purchase a Put option with a higher strike than the current price of the stock? Same for a Call option where the strike is lower than the current stock price. Seems counter intuitive? Doesn't a buying a Put option imply that you would make a profit if the stock price decreases? But in this example its already below the strike?
Great question! Answer this question: if you bought the 270 put, exercised it, then closed the resulting stock position, what would the p/l be? Keep in mind you lose the entire option value when you exercise it because you are “consuming” it in exchange for the shares.
Here's the math:
Option Price of 270 Put: $22.50 (I pay $2,250 to buy it)
Stock Price: $257.50
If I exercise the put, I will consume the 270 put and get -100 shares at $270/share. The $2,250 valued option disappears from my account.
I can close the short stock at $257.50, making +$12.50 per share on the short, or +$1,250 total on the 100 shares of short stock.
I paid $2,250 for the 270 put initially, therefore my net P/L is -$1,000 for doing that.
Lesson: You can't make an easy profit by buying an ITM put or ITM call and then exercising it because the option includes the profit you could make by doing so, but also includes EXCESS value (extrinsic value) that represents the additional value the option could make before expiration.
So why would you buy an ITM put vs. OTM put? You get different risk/reward profiles and exposures.
Look at the options in this link: imgur.com/a/6wAXfXR
The 150 TSLA call is $35 ITM and costs $3,935 to buy it. I'll get a delta of +83, meaning I'll make $83 if TSLA goes up by $1 and lose $83 if TSLA goes down by $1. I only lose the total $3,935 if TSLA is below $150 in 77 days. So TSLA needs to fall ~20% for me to lose all my money.
The 190 TSLA call is OTM and costs $1,310 to buy it. I'll get a delta of +48, meaning I'll make $48 if TSLA goes up by $1 and lose $48 if TSLA goes down by $1. I lose the total $1,310 if TSLA doesn't increase above $190 by expiration, and I need TSLA above $203.10 to breakeven at expiration.
The 150 call purchase is a higher probability bet that gives the owner more P/L exposure to changes in the stock, but costs a lot more to enter. It's less of a gamble to buy this option.
The 190 call purchase is a lower probability bet that requires a stock price increase just to breakeven at expiration, though the trade could make money well before expiration as long as the stock starts increasing soon. It's a cheaper option and more of a gamble.
So it depends on the trader's outlook for the stock. A large account trader who wants high probability, bullish exposure to TSLA that mimics a stock investment, but doesn't want to pay for pure decaying extrinsic value (like the 190 call), and doesn't want to pay for all the stock might by the 150 deep ITM calls. They'd get the P/L exposure of +83 shares of stock, which would cost $15,000 to buy 83 shares at $185/share instead of buying the 150 call for $3,935. So they get lots of leverage.
A trader buying the 190s or ever further OTM calls is making a bigger gamble that TSLA will go up fast and soon, otherwise they will fight time decay and lose money on the trade, and lost 100% of their money if TSLA doesn't increase.
All of this same commentary could be flipped to puts for various put comparisons.
Thanks for all your videos. I am learning a lot. I have a question. You have mentioned in many videos that the premium price will increase/decrease to include the additional benefit it provides so we never have to exercise options. But if delta is 0.25 then the premium will increase only by 25 cents for every $1 increase. Right? Could you please clarify?
Great question. The options INTRINSIC value will increase by the amount of the stock moving if the option is ITM. If the call strike is 100 and the stock goes from 105 to 106, the calls intrinsic value goes up by $1.00 but the options prices does not if the delta is 0.50.
The reason is because the options price shifts from extrinsic value to intrinsic value as it becomes further ITM. So if the stock is 105 and the 100 call is worth $8 and the delta is 0.75:
The call starts with $5 of intrinsic and $3 of extrinsic.
Stock goes up by $1 to $106 and now the call is worth $8.75. $6 of the value is intrinsic and $2.75 is extrinsic. So the option intrinsic went up and the extrinsic went down (the ratio of intrinsic goes up and extrinsic goes down when the option becomes further ITM).
In your example of the delta being 0.25, this means the option is not in the money and therefore has no intrinsic value so the example above does not apply.
Thank you very much for clarifying. Your videos are just great. Keep up the good work.
theoretically, if you were in a losing trade, could you just buy and hold at that point? example: i open a call with strike price of $100 and start losing on it. i close at 90. so now i'm down $10 per share. Do i have to immediately sell that and take the loss? or can i just hold on to the 100 shares in hopes that the stock goes back up eventually? if that's the case, it would be hard to lose on a blue chip stock
Not necessarily because you don’t have a stock position in your example. If you buy a call with a strike of 100, you don’t have any stock unless you exercise the call.
If the stock drops to $90, your call will be less valuable and you’ll have losses on the call option. If you exercised the call, you’d be converting your call into 100 shares with a purchase price of $100 per share. This would not be logical as you could buy 100 shares at the current stock price of $90 instead of paying $10 more per share to buy them at $100 with your call.
With that said, you could hold the losing call position and open a new stock position by purchasing shares at the now lower stock price, which could recoup your losses eventually if the stock does trade higher in the future.
@@projectfinance thanks for the in depth answer. this is making more sense to me. you're amazing at explain these complex topics. Thank you!
Hi there - i wanted to buy your course - is there a coupon code I can use for Christmas? :)
Yes, there is the code XMAS23 which is for 25% off through the end of the year: optionsforbeginners.teachable.com/p/data-driven-options-strategies?coupon_code=XMAS23&product_id=4893977
Thanks for watching!
Hi bro
What is the difference between this version and old one ?
Much improved visual examples and explanations, some sections with more emphasis, etc. overall similar curriculum but different structure
Great video. What platform are you using for your graphs / slides?
I make the slides in canva but then I work with a video editor to animate everything. So the animations are in adobe premiere / after effects
Thank you!
Who are the people holding all these options until they expire? Someone has to be left holding the bag? What kind of people are those?
1:45:49
Hey guys am new here and to the trading world.. i need y'all help to be the Top Dawg of all options trade in a week time .. appreciate ✌️
18:40
Anyone trying to make a groupchat ?😭 we new traders need to stick together
Where can we connect?
I don't know about trading but i want to learn treading i don't know English also very well i will understand little bit i am from india.
Where i can start treating
I need to look into the best options brokerages available to you
What app you use for trading
Got it buy, 100 tesla calls to get money.
Martin Mark Hall Susan Thomas Michelle
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Any suggestions on puts against RDDT? Most tech stocks fall within the first three months, is my observation. I am long term bullish, slow growth but nonetheless consistent, but in the short term, I'm bearish. Any suggestions would be appreciated, thank you!
How are you in the money if the call price is under the stock price? Isnt that what a put is?
In the money is a call with a strike price below the stock price. It’s in the money because the call owner can exercise it and buy stock below the market price of the shares (since the call strike is below the stock price)
Ok. I get it now.
Hi. Thank you for this video. I have ADHD so I have had to re-watch some parts many times, especially about Intrinsic Value.
I've been trading on and off for 5/6 years and in 2k20, the crash to be specific I was making £20k a day average for maybe a month, then blew it (not on options). Messed me up for a long time, the greed and then doing everything the oppoisite of how I generated it to lose it all. Starting to get into trading again and never looked at options before. Thank you for explaining it and thank you for the addless video!
Thanks for the comment and watching! I appreciate the feedback. I have a hard time focusing too so I can relate to you. Keep learning/studying and watching more content! It will all come together and make more sense over time
Thank you very much for all the work put into this, Chris!
The first time I came across your channel, it was through the older video guide for options trading. Prior to that, I had never tried to understand it and your take on it was very enlightening.
So much, that I decided to watch this video as well! While the explanation on the first version felt sort of more slowly paced and a bit more repetitive, which makes everything more comprehensive and digestible (to me), I found this newer version to have some additional and relevant information. Oh, and I must say it is pretty reassuring to see you "risking" actual money to show things during market open and not only through some paper trading or simulations. You should definitely continue this practice. Overall, I believe I understood the assignment! Thanks a lot and I hope to keep seeing your growth!
Wow, this is hands down the best explanation of options trading I've come across! You broke down complex concepts into easy-to-understand steps, and your examples were spot on. Thanks for making options trading accessible and interesting. Subscribed and looking forward to more content like this!
Thanks for this comment! This video took a lot of effort so I’m glad it’s paying off and helped you!
Wonderful lesson so easy to understand, clear voice, great graphics just bought a SPY option put to make a little money let's see how tis goes!
Hi Chris, I find your videos very educational. Are you going to be doing some livestreams again where you are adjusting positions live and discussing different stocks in the QA. I found some of those videos very informative as well because they are a live practical demonstration of these strategies.
really appreciate you putting this out for broke old fuckers like myself. I really liked the pulp fiction picture you had in the old version. that is a hilarious picture
Going into this with ZERO knowledge, definitely gotta take notes
Can you do a video to compare Options and Futures
Yes!
this guy forgot his video said beginner im s beginner and know wtf he talking about
I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much
Essential strategies in an easy format, a must-have for options traders.
Hey, it's been a while since I seen you on here! Glad to see a new video out!
Thank you!
I love this presentation. You're very articulate. Great job! I'm new to trading but have a lot of experience with data analysis, mostly in the biosciences. The idea of using my data analysis skills in something that has the potential to directly make me money is an exciting prospect. I can't wait to learn more. Thank you so much for putting this together.
Thank you for the comment! I appreciate the feedback and I’m stoked this video helped!
I’m going to start from this channel’s information highly appreciated very we’ll discussed you do talk alot tho😂😂
Haha thank you for watching and yeah I can ramble a lot and repeat things which is why I do have an outline for the video but sometimes I just go hahah
I have followed you for quite some time, but this is the most in-depth class that I absolutely have been needing. Thank you so very much. Absolutely top-notch. Please keep us posted for any updates.
Wow that’s so great to hear! I am glad this project was worth the effort and you got a lot of value from it. Thanks for the view and support!
What happens if the buyer close the option ITM. As example, if they bought a call option at 50$ and they sold it at 65$. Does the seller lose that 15$/share so 1500$? Who lose the money
If a call buyer pays $5 for an option and sells it for $15, they make $10. A trader who shorted the option would lose the $10. It’s all little more complicated than that as the same trader who took the other side of your entry is not necessarily the same trader taking the other side of the exit.
@projectfinance so how do covered calls work then if you can't cover the full amount of the losses by selling your shares? Have you made any videos on that subject of covered options shorting? It would interest me
@@antoine.d3775 If you trade a CC the gains on the shares will cover the losses on the short call since your 100 shares will make more money per $1 stock increase than the short call will lose. At/near expiration, the short call will lose $100 for every $1 increase in the stock price if it is ITM. There is never a scenario where the short call starts losing more money than your 100 shares per $1 increase in the stock
@projectfinance yea you're right since I'll get a prenium (the $$ that I got from the buyer when they bought the call) and I'll also gain the money when I sell the stock since it obviously went up if the buyer ends up making money. Thanks, super helpful! 👌
I’m here because a friend is making bank, he sent me this link. Here’s hoping
Thank your friend for sharing! I hope the video helps you learn a ton!
The upstart thing was painful to watch XD Thanks for this great tutorial.
Haha a classic for sure. Thanks for watching!