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after watching the beginner video. I was under the impression that you still have to buy the shares of the call options. how are you able to buy 125 call options without buying the stock when you accept the call option? with the 10,000 example? wouldn't you be limited to 2 call options?
@@mikep8953 The brokerage firm will buy the shares at $38, sell at $46 and leave you the difference assuming you exercise or wait til expiration. You will never actually be holding the shares. You don't need the funds to purchase all of the shares. Incidentally prior to expiration if the price moved in the direction you want, you can actually sell the options contracts back and their cost would be at basically $10.80 if the stock moved $10.
Stay near the strike price, At the money, in the money or slightly out of the money. Push the expiration date out as far as possible to give you some time and go with the trend not against it unless you have an edge.
They literally have options trading in exchage traded index funds now. Companies are now trading options for investors that don’t know how to do it themselves. All you do is put your money into index funds that trade options and the companies will distribute the returns to the investors in the form of dividends. These types of index funds has definitely revolutionized the stock market for sure. People are getting wealthy way faster from the stock market now because of these types of funds.
Yeah I didn’t know anything about options but bought meta calls before earnings. Extremely stupid and paid the price to learn. Thankfully just one call…
I know I’ll get criticism for people saying it’s risky, but I don’t think people understand that I made it for people that want to learn options. This is not for everyone. But I hope this helps you!
Of all the lengthy videos that I watched this is the most comprehensive and informative. 6 mins and I have a better understanding. Thank you for your videos you are definitely a good source for education
I just got into options and made my first sell call option today. I stuck with 80% and higher chance of winning ones so I was wondering why would anyone would want to bet on a 20% of winning. But now I understand why, the reward is very rewarding if they win. I’ll just chill with my few hundred dollar gains
I see alot of comments saying dont do option you will go broke i am very new to the market and i haven put anymore than 3k in and i already making headway im not the smartest nor am i the dumbest im pretty average but after losing some options i started researching more and paying attention to graphs and i made back all the money i lost and some it just takes learning and patience
It took me 5 years to figure out successful stock trading and 10 more years to refine it. It takes more work than almost anyone is willing to do. It’s good to say to yourself “I’ve seen this picture before” and trade accordingly.
Loving these options videos brian please keep them coming 🙏… they really dont want us to know this info it could literally be life changing for a lot of people when the right opportunity arises
This is a good video for a baseline on options, thought it does not take into account the greeks. For example, if you buy an option on a stock with high implied volatility, the stock could go in your direction but you could lose more money to theta decay.
Yeah but you forget to mention anything about the gamma in your comment. So that was a good baseline comment, but left out a few things. This video was made for beginners.
thats the way to do it, covered calls and cash secure puts... buying options is VERY risky and people will loose it all, but selling options on stocks you are already own or stocks you want to own, is the way to go. There is still risk, but WAY more mitigate it
Brian, thank you for this vid. This is the best time to start learning about this because options are going to be exceptional when Feds lower interest rates and turn the money printers back on.
Very informative video you have, I have been able to understand the messages you pass but there are some other challenges that may come about when taking some other risks or planning
I don’t think anyone that has dedicated time,money and efforts to scale to new net worths in whatever field of investments hasn’t reach some of the challenges that you would face personally.
Options are the quickest way to go broke. People should do practice trade until they figure things out. Once they think they’re good enough, only trade the ‘best’ 30% of the time. The other 70% of the time observe what goes on the the market, own predictions and economy. It’s virtually impossible to do single day trading because that’s dominated by computer trading systems. Figure out a longer time period to fully execute your trades. Sell quickly if things go opposite of what you predicted would happen. Always be able to answer the question “Why do I think this will be a successful trade”
A smart way to go about this to avert risk is let’s say you take $5000 and you hedge and you buy a call and then you also buy a put at the same time so if it goes up or down you either way you make money, and if it goes down, worst case scenario you lose $5000, but gain over 100K
Hmmm there are some more aspects to it. I sell options and have delta neutral straddles and strangles to profit from theta decay and use 10% of my portfolio for option buying. Time is not necessarily against you.
That is true, however if they make too much (millions, tens of millions, etc) they are on a target list and will be investigated. Sometimes they just have to pay a hefty fine, but they made more money that the fine so, its a win for them. However it a bad look publicly so its much better to just buy stocks and stay off the radar.
Im learing the charts rn, but i still got confused, if we buy the option based on the chart, but til how long ?? The chart didnt say the date,etc for how long the option will goes ??@@MrSimmons79
Also, if the stock goes up, do actually have to buy the stock or do you just cash out the contracts? I was thinking you would have to buy the (12,500) shares then resell them? Who has that kind of money?
Everybody was once a beginner but I understand what you’re saying, newbies should understand first and proceed with caution (which is why I made this video to help).
Depends on your country. In the USA and Canada you can close out the option at any time before the expiration date but in the UK you can only do so on the actual expiration date.
@@toshatalks8544 trading with only 100$ will get you small gains yes you can start off with 100 in options market but tbh I’d trade 1k+ into close itm options on weekly basis or two-3 weeks out
If that is the case.. just be the casino, you can sell the option to the one buying... you collect the money and keep it. If it expires worthless you get to keep it all.. way better and less stressful
You can also buy 3X leveraged ETF's which unlike options, give you leverage without the time risk, and are usually smoother moving than any single stock. And the spreads for getting in and out are usually much tighter than stock options.
You are wrong because if the stock moves up $10 dollars that doesn’t mean the options move up ten dollars, that is because of the delta, the delta may be .30 cent for every dollar the stock move so if the stock move up $10 dollars the contracts price would move up about $3
I think I'm misunderstanding something. $80 is the price of option contract, but when you choose to exercise the call at $46, you still have to buy the stock at the strike price ($38) before selling it, right? That's another 125*100*$38 = $475k of capital needed before immediately selling off and profiting the $90k. Where am I wrong? Is the buy to sell transaction automatic, and are you not given the choice to hold onto the 12500 stocks you bought at a discount?
question please answer: I placed 3 stock options calls. and the price of the stock went up $20+. BUT my option value didn't go up like it usually does. etrade said even though it went up it was out of the money. BUT every time I place trade was out money but my value in the change still went up BIG. now etrade saying people did buy that contact. I THINK it's something going on!! Can anyone please explain??
No, one option contract is equal to 100 shares. The price of the option will show like in the example, .80 cents but when you go to buy it it will show 80 dollars
All option contracts, Puts or Calls, are for 100 shares of the underlying equity. One contract = 100 shares. Five contracts = 500 shares. 10 contracts = 1,000 shares.
Options are normally designed to expire worthless. Due to IV crushed and theta decay people usually lose money by buying options even you are right on your direction. For novice it is better to sell covered call and cash secured put. Just buy stocks you want to hold it for long term and start selling options.
On the other side, if you SELL options instead of buy them, you flip this around. You collect that $10,000 from the people who didn't get the timing or strike price right. If you buy, you must be right on direction AND time. If you sell, you win if the stock goes down or stays the same. Much higher odds of winning the trade.
@@benny9041 to sell options, you have to either own at least 100 shares / contract (to sell covered calls) or you have to have the cash in your account to buy 100 shares of the stock at the strike price you chose (to sell cash secure puts)
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Options Trading For Beginners (Complete Guide): ruclips.net/video/NW1ziUDjB7w/видео.html
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Brian one video on crypto
after watching the beginner video. I was under the impression that you still have to buy the shares of the call options. how are you able to buy 125 call options without buying the stock when you accept the call option? with the 10,000 example? wouldn't you be limited to 2 call options?
@@mikep8953 The brokerage firm will buy the shares at $38, sell at $46 and leave you the difference assuming you exercise or wait til expiration. You will never actually be holding the shares. You don't need the funds to purchase all of the shares. Incidentally prior to expiration if the price moved in the direction you want, you can actually sell the options contracts back and their cost would be at basically $10.80 if the stock moved $10.
Great advice as all ways. Always appreciate the genuine display when discussing your opinion.
Thanks Brian, I’d love to see more of these option strategies videos 📈
Stay near the strike price, At the money, in the money or slightly out of the money.
Push the expiration date out as far as possible to give you some time and go with the trend not against it unless you have an edge.
Good advice
Exactly this!
is holding position less than one month allowed...for example...one hour expirations..?
@@endo-c3uusually weekly expirations. You can trade the spot with I believe daily expirations. You can sell your position whenever.
@@endo-c3u Yes, you can close and sell it the same day.
Brian is the type of guy who eats his Alphabet cereal in Alphabetical order 🙌
😆
I do that and i dont know why😅
😂
😂
Lmao 🤣 🤣 🤣
They literally have options trading in exchage traded index funds now. Companies are now trading options for investors that don’t know how to do it themselves. All you do is put your money into index funds that trade options and the companies will distribute the returns to the investors in the form of dividends. These types of index funds has definitely revolutionized the stock market for sure. People are getting wealthy way faster from the stock market now because of these types of funds.
Thanks!
Thank you Bugatti! I appreciate that super thanks!
Thank you Brian! Always dropping the videos we need the most
"some win big, some lose big" -> more like "few win big, most lose big".
Yeah I didn’t know anything about options but bought meta calls before earnings. Extremely stupid and paid the price to learn. Thankfully just one call…
@@fizzsoduh I don't like buying before earnings because of IV.
@@fizzsoduh how did you lose money didnt meta shoot up cause they preformed well on earnings?
@@Darkcamera45 no look apr24-apr25 on their chart
@@Darkcamera45might have been the prev earnings
When Brian was born, he congratulated his parents, and drove them home. 👋😁🤚
💯, Lol!
😂
No body can explain better then you love your all videos
Thank you so much for making everything so clear and understandable.
Thanks dude, I needed this one :)
I know I’ll get criticism for people saying it’s risky, but I don’t think people understand that I made it for people that want to learn options. This is not for everyone. But I hope this helps you!
Of all the lengthy videos that I watched this is the most comprehensive and informative. 6 mins and I have a better understanding. Thank you for your videos you are definitely a good source for education
you are one of the best teachers. thanks for sharing knowledge in a very clear and precise manner.
I just got into options and made my first sell call option today.
I stuck with 80% and higher chance of winning ones so I was wondering why would anyone would want to bet on a 20% of winning. But now I understand why, the reward is very rewarding if they win. I’ll just chill with my few hundred dollar gains
FINALLY MORE OF THESE
I see alot of comments saying dont do option you will go broke i am very new to the market and i haven put anymore than 3k in and i already making headway im not the smartest nor am i the dumbest im pretty average but after losing some options i started researching more and paying attention to graphs and i made back all the money i lost and some it just takes learning and patience
any advice on how to research or learn the good shit?
Selling out of the money covered calls is the less risky strategic way to make money on stocks you already own.
Yes, I made a video on that months ago. I think it has over a hundred thousand views so far.
Yes, but if the stock price exceeds the price limit then you lose all your shares
@@Frank-lk8ox yes but you make profit on the sale of the stock and premium received. You don’t sell covered calls on stock you are afraid of selling
Your just forced to sell at the strike price you don’t lose any money
Theres so many variables involved with trading options it would take you years to scratch the surface..and then theres market maker manipulation etc..
manipulation is the word people use because they dont understand market cycle.
@@italianmiltyfriedman6264 Gamestop..just to name one.ive been trading options since early 80's.
It took me 5 years to figure out successful stock trading and 10 more years to refine it. It takes more work than almost anyone is willing to do. It’s good to say to yourself “I’ve seen this picture before” and trade accordingly.
you forgot tu subtract the premium price from the final profit when your call option expires in the money
Loving these options videos brian please keep them coming 🙏… they really dont want us to know this info it could literally be life changing for a lot of people when the right opportunity arises
Yes! It’s my pleasure to teach this knowledge. Thank you for the support!
Great education video!! Thank you!!
Thank you for the information Brian! Amazing and informative as always.
I decided it's time to start learning this stuff... this was an excellent video! Very well spoken, and the examples were crystal clear.
Finally! An extremely SIMPLE explanation!
New subscriber i love this channel
Thank you for the information! I was wondering what options were. Might give it a try 🤔
Most lose big. Some win big. This feels more like gambling than investing.
It is gambling 😂
@@hermeskino711 no its not
Unless you are Pelosi.
Trading is actually gambling
This option strategy is high-risk high reward. The success rate is very low for most people
That’s why the odds are 2:1, 5:1, 10:1. Mathematically what you say is correct.
This is a good video for a baseline on options, thought it does not take into account the greeks. For example, if you buy an option on a stock with high implied volatility, the stock could go in your direction but you could lose more money to theta decay.
Yeah but you forget to mention anything about the gamma in your comment. So that was a good baseline comment, but left out a few things. This video was made for beginners.
Thank You . Much more informative 👍
Brian I normally sell puts and calls.
thats the way to do it, covered calls and cash secure puts... buying options is VERY risky and people will loose it all, but selling options on stocks you are already own or stocks you want to own, is the way to go. There is still risk, but WAY more mitigate it
Brian, thank you for this vid. This is the best time to start learning about this because options are going to be exceptional when Feds lower interest rates and turn the money printers back on.
Thanks for the video
It’s my pleasure and thank you for the support Mendez!
Didn't even bring up short term capital gains as a tax man lol
All kidding aside, you're videos are excellent.
That's a very valid point. Add in trade commissions and slippage, and traditional "Buy and Hold" investing looks better and better.
Great advise Brian, AMC call options worked out well
Very informative video you have, I have been able to understand the messages you pass but there are some other challenges that may come about when taking some other risks or planning
I don’t think anyone that has dedicated time,money and efforts to scale to new net worths in whatever field of investments hasn’t reach some of the challenges that you would face personally.
Hey Brian! Love your videos theyre very helpful! Could you do a video explaining different types of strategies we could use to minimize our risk?
Does it have to be above 38 by the end of the month ... or does it just have to pass 38 within the month?
what's the difference between exercising vs selling an Option contract?
thanks so much sir it is amazing
Excellent material. The best i've seen on this particular subject.
Thank you for your videos.
Options are the quickest way to go broke. People should do practice trade until they figure things out. Once they think they’re good enough, only trade the ‘best’ 30% of the time. The other 70% of the time observe what goes on the the market, own predictions and economy. It’s virtually impossible to do single day trading because that’s dominated by computer trading systems. Figure out a longer time period to fully execute your trades. Sell quickly if things go opposite of what you predicted would happen. Always be able to answer the question “Why do I think this will be a successful trade”
Easiest way to become rich, change your thinking. Dont scare other people
A smart way to go about this to avert risk is let’s say you take $5000 and you hedge and you buy a call and then you also buy a put at the same time so if it goes up or down you either way you make money, and if it goes down, worst case scenario you lose $5000, but gain over 100K
Best option, low cost index fund. That’s only option you need ❤
slow and boring route sure
Thanks for this new video on options. I was just recently watching the other video you made on options.
Great way to explain it
Super helpful video, thanks
Hmmm there are some more aspects to it. I sell options and have delta neutral straddles and strangles to profit from theta decay and use 10% of my portfolio for option buying. Time is not necessarily against you.
I think the ones who benefit are only the ones with insider info..
That is true, however if they make too much (millions, tens of millions, etc) they are on a target list and will be investigated. Sometimes they just have to pay a hefty fine, but they made more money that the fine so, its a win for them. However it a bad look publicly so its much better to just buy stocks and stay off the radar.
If you learn technical analysis you have an edge over most. Not always insider info.
Yes they have to have information especially when putting in big money
Im learing the charts rn, but i still got confused, if we buy the option based on the chart, but til how long ?? The chart didnt say the date,etc for how long the option will goes ??@@MrSimmons79
Amazing yet simple explanation sir
Thank you for the feedback and support!
Thank you for this, super simple and clear.
Also, if the stock goes up, do actually have to buy the stock or do you just cash out the contracts? I was thinking you would have to buy the (12,500) shares then resell them? Who has that kind of money?
Risky stuff… definitely not for new investors but good info 👍
Everybody was once a beginner but I understand what you’re saying, newbies should understand first and proceed with caution (which is why I made this video to help).
@@clearvaluetax9382 absolutely right, everyone has to start somewhere
I personally don’t feel comfortable with options 😂 but margin is whole new level of crazy for me.
@@clearvaluetax9382 ..Is it 30 days exactly or is it within 30 days? Say it hits $38 in 10 days, do you cash out then?
In the above case. Call option need to wait until the expiry or allowed to sell before expiry.
Depends on your country. In the USA and Canada you can close out the option at any time before the expiration date but in the UK you can only do so on the actual expiration date.
@@DaBooster Noted and thanks for responding.
I’ve been trading options for years it’s so crazy watching this and how I started…I use to be so confused now I trade with confidence
Any tips with only 100 bucks and new to this?
@@toshatalks8544 I would start off with atleast 1000$
@@toshatalks8544 trading with only 100$ will get you small gains yes you can start off with 100 in options market but tbh I’d trade 1k+ into close itm options on weekly basis or two-3 weeks out
100 will only gain 10-20$ as too 1k can get double or 300-800$
can you share some tips
I recommend a video explaining the sale of cash covered puts to obtain stock. It's much safer than buying options. It is a good beginner strategy.
Great video but it doesn't say if you are locked to that 1 month or not.
The spreads are ridiculous Brian u didn't mention the delta and theta bleeding the call or put
It’s basically gambling
If that is the case.. just be the casino, you can sell the option to the one buying... you collect the money and keep it. If it expires worthless you get to keep it all.. way better and less stressful
I mean yes, but as far as I’m concerned, so is investing in general. At least the stock market, since it’s all bullshit anyway.
@@dontforgettolike7127BS how??
no risk no reward
@@dontforgettolike7127voo or vti then and forget it
You can also buy 3X leveraged ETF's which unlike options, give you leverage without the time risk, and are usually smoother moving than any single stock. And the spreads for getting in and out are usually much tighter than stock options.
Will you get margin call if you didnt enough money when the option expires ITM?
no, your broker will sell the option minutes before expire
On the other hand I would argue that covered calls are your lowest risk-lowest reward.
First 💪 great video!
Hi Seezee thank you for getting here 1st!
You are wrong because if the stock moves up $10 dollars that doesn’t mean the options move up ten dollars, that is because of the delta, the delta may be .30 cent for every dollar the stock move so if the stock move up $10 dollars the contracts price would move up about $3
Yes but as you get closer to expiration the value would progressively get closer to $10.
@@pedaltheglobe419 nope. Because of the time decay.
Thank you! I learned more from this 8 min video than any other video on RUclips trying to explain options.
thank you so much, where has this math been my whole life
I think I'm misunderstanding something. $80 is the price of option contract, but when you choose to exercise the call at $46, you still have to buy the stock at the strike price ($38) before selling it, right? That's another 125*100*$38 = $475k of capital needed before immediately selling off and profiting the $90k. Where am I wrong? Is the buy to sell transaction automatic, and are you not given the choice to hold onto the 12500 stocks you bought at a discount?
I'm confused as well😅😅
Contract price is 0.80 cents according to him
Buy Leap options which gives more Time
In these scenarios would I be selling the option or excersizing the option
TIme decay kills it if your timing and your risk management is off. Not for beginners.
Do some people not start as beginners?
What are most favorable to buyers put option, call option or cash secured options? I am thinking of starting option trading.
can you sell the options before it expires in 1 month?
Yes. You can also set stop limits.
Yes you can.
Finally a well explained video!!!!
Starting out LEAPs should be bought if doing stock options
question please answer: I placed 3 stock options calls. and the price of the stock went up $20+. BUT my option value didn't go up like it usually does. etrade said even though it went up it was out of the money. BUT every time I place trade was out money but my value in the change still went up BIG. now etrade saying people did buy that contact. I THINK it's something going on!! Can anyone please explain??
Go to our website message board and let me know more details so we can take a look.
@@clearvaluetax9382 HI I sent the message
Thanks Brian 😊 😊
I am new to this, but when you say that you lose the 10k is because the 10k is used to pay the premiums of all this shares correct ?
That is correct, if the stock doesn’t go above 38 in the example you don’t exercise the option and simply eat the cost of the premium.
Interesting , so call options only came in quantity of 100?
No, one option contract is equal to 100 shares. The price of the option will show like in the example, .80 cents but when you go to buy it it will show 80 dollars
All option contracts, Puts or Calls, are for 100 shares of the underlying equity. One contract = 100 shares. Five contracts = 500 shares. 10 contracts = 1,000 shares.
Thanks brian
Hi Qdood! Happy Sunday!
THANK YOU, Perfect explanation
I’ve been thinking of getting into options for years, but I know I’d get greedy and lose it all 😭😂😂
I suggest buying the new tesla innovation shares at this point as they are relatively cheap and are sure to yield long-term profits
Ty for explain how wsb works
How/When do you account for the $$$ you will need to purchase the shares at time of exercise?
Options are normally designed to expire worthless. Due to IV crushed and theta decay people usually lose money by buying options even you are right on your direction. For novice it is better to sell covered call and cash secured put. Just buy stocks you want to hold it for long term and start selling options.
You should go through option trading strategies; covered call, protective put e.c.t
I’ve already made those videos months ago. They have hundreds of thousands of views.
Can you explain the Greeks in stock Options. You're able to explain things in ways I can understand so id appreciate it if you did. Thanks!
Yea please
Now I finally get it. Thanks man!
On the other side, if you SELL options instead of buy them, you flip this around. You collect that $10,000 from the people who didn't get the timing or strike price right.
If you buy, you must be right on direction AND time.
If you sell, you win if the stock goes down or stays the same. Much higher odds of winning the trade.
How do you sell something that you haven't previously bought?
@@benny9041 to sell options, you have to either own at least 100 shares / contract (to sell covered calls) or you have to have the cash in your account to buy 100 shares of the stock at the strike price you chose (to sell cash secure puts)
If you buy, you can't lose more than 100%. If you sell, there's no limit to how much you can lose.
@@TimGautier very good point
Future contracts are much better compared to options. No theta decay, no PDT restrictions plus tax benefits.
More of these pls
Thank you
Thank you for getting here so fast D Raven!
Thanks for teaching me at this novice level!
In times of uncertainty, people gamble more with their money. So how often we win in Vegas?
Brian is the type of guy to put insurance on his pocket protector
No, I am the type to have an extra one ready.
Can't you get out of the option before the expiration date?
It’s definitely a learned skill that can get you out of your 9-5 job if it’s done correctly consistently.
Oppa, saranghaeyo 🙆🏻♀️
You can sell options too, far more sustainable and profitable
Excellent explanation