Isn’t it 8 points or 800 for the premium? You say 9 but I’m just wondering if this is a mistake? I haven’t listened to the full video but you’ve said 9 a few times. I’m at the 8 min mark
There are 4 lectures on Options. Should be watched in order. Covered calls are found in Lecture 3 and spreads and straddles in Lecture 4. They are time stamped.
That's what I love about comments like yours. Knowledge is not a zero sum game. Its a win win game. You intellectually own it. I still do too. The world is intellectually richer! Pay it forward.
Thnx for the response on a previous question Dean. I have a possibly dumb question for a long stradde: Long 1 AAPL Dec 110 Call @8 Long 1 AAPL Dec 110 Put @8 Is it profitable if it is A. Above 126 and below 94 or B At or above 126, at or below 94 If i see this on the exam, which would be more accurate?
Question to test my understanding of premiums for calls and puts. I can't memorize it so think of it intuitively. For calls, the lower strike price has a higher premium than a higher strike price because the amount of profit for the lower strike price is more. For example, $35 -> infinity vs. $55 -> infinity. The former has more profit than the latter, so the strike price is more. For puts, the profit is BE -> 0. Therefore, if a put was $35 vs $55, the $55 would have a higher strike price because I can make $5500 on the latter, and $3500 on the former?
I’m a bit unclear on exactly what is being asked in your 2nd follow up question re IV @ 10:13 when AAPL is at 126. What would a sample answer set look like? Your just trying to calculate IV, right 126-110=16?
Yes. A customer buys 1 APPLE 110 call at 8. Several weeks later with Apple trading at 126 the customer closes out at intrinsic value. What is the gain or loss? A. 8 points or $800 Opening purchase at 8 and closing sale at 16 the intrinsic value. (126-110). What is the intrinsic value of an APPL 110 call with Apple trading at 126? A. 16 points.
Can anyone please help with this question? "On the same day a customer buys 100 shares of ABC stock at $30 and sells 1 ABC Jan 30 Call @ $3 and sells 1 ABC Jan 30 Put @ $2. The maximum potential loss is: 5,500" I don't understand why he can afford to lose 2.5. I get there's a $500 credit, so he will get $500 from the options and since the short put must be exercised he has 200 shares.
You have 200 shares of worthless stock at 60. That is $6,000 less the $500 received for selling the call which expired and the put which was exercised. $6,000 -$500 = $5,500.
It is not my job to answer your practice questions. Did you fire up a T? You are our $11,600 for the stock. You brought in $200 for the call. So net out of pocket $11,400 for 200 shares. $11,400 divided by 200 shares results in a breakeven of $57 per share.
Thank's Dean for all your video's. Watching a lot of them this week to review before I test on Friday.
You got this!
Your videos are great! Great use of analogies and use of personal stories from your career.
Glad you like it and find it helpful.
Your videos are great! Where can I find the other lectures that you are referring to at the beginning to watch before this one on options? Thank you.
All lectures are found in the playlist for those lectures. So they would be found in the options playlist
Isn’t it 8 points or 800 for the premium? You say 9 but I’m just wondering if this is a mistake? I haven’t listened to the full video but you’ve said 9 a few times. I’m at the 8 min mark
Sorry you caught it 😀
Yeh. Probably should work from a script instead of doing it on the fly.
Dean Tinney I think it’s good. It truly helps, I’m sure lots of people, like myself, really appreciate content like this.!
thanks so much! everything is easy for me except for the last two for some reason so i'm going to study those concepts more.
There are 4 lectures on Options. Should be watched in order. Covered calls are found in Lecture 3 and spreads and straddles in Lecture 4. They are time stamped.
@@Series7Guru I got spreads and straddle down! Covered calls not as much but I’m reviewing your lecture on that rn and it’s helping a lot. Thanks !
You rock!! I FINALLY understand options thanks to you!
That's what I love about comments like yours. Knowledge is not a zero sum game. Its a win win game. You intellectually own it. I still do too. The world is intellectually richer! Pay it forward.
@@Series7Guru agreed 100%
Thnx for the response on a previous question Dean. I have a possibly dumb question for a long stradde:
Long 1 AAPL Dec 110 Call @8
Long 1 AAPL Dec 110 Put @8
Is it profitable if it is
A. Above 126 and below 94
or
B At or above 126, at or below 94
If i see this on the exam, which would be more accurate?
Depends on the question. Profitable A. Breakeven or profitable B. RTFQ!
@@Series7Guru Thank you sir!
@@mariorazy de nada
Very helpful!! TY for detailed explanations
You are welcome. Kudos on the early morning work in execution of your study plan. Honored to be a part of it.
Once again...The MAN!
And once again, you are busy executing your study plan. KUDOS!
@@Series7Guru thanks Dean! Take my test Friday. Crunch time!
Question to test my understanding of premiums for calls and puts. I can't memorize it so think of it intuitively.
For calls, the lower strike price has a higher premium than a higher strike price because the amount of profit for the lower strike price is more. For example, $35 -> infinity vs. $55 -> infinity. The former has more profit than the latter, so the strike price is more.
For puts, the profit is BE -> 0. Therefore, if a put was $35 vs $55, the $55 would have a higher strike price because I can make $5500 on the latter, and $3500 on the former?
From the long perspective you are correct. From the long perspective lower strike calls are more desirable and higher strike puts are more desirable.
@@Series7Guru thanks!
De nada.
Thank you so much this video really helped me a lot !!!
Glad to hear you found it helpful.
I’m a bit unclear on exactly what is being asked in your 2nd follow up question re IV @ 10:13 when AAPL is at 126. What would a sample answer set look like? Your just trying to calculate IV, right 126-110=16?
Yes.
A customer buys 1 APPLE 110 call at 8. Several weeks later with Apple trading at 126 the customer closes out at intrinsic value. What is the gain or loss?
A. 8 points or $800
Opening purchase at 8 and closing sale at 16 the intrinsic value. (126-110).
What is the intrinsic value of an APPL 110 call with Apple trading at 126?
A. 16 points.
Can anyone please help with this question? "On the same day a customer buys 100 shares of ABC stock at $30 and sells 1 ABC Jan 30 Call @ $3 and sells 1 ABC Jan 30 Put @ $2.
The maximum potential loss is: 5,500" I don't understand why he can afford to lose 2.5.
I get there's a $500 credit, so he will get $500 from the options and since the short put must be exercised he has 200 shares.
You have 200 shares of worthless stock at 60. That is $6,000 less the $500 received for selling the call which expired and the put which was exercised. $6,000 -$500 = $5,500.
An investor is long 200 shares of ABC stock at $58 and short 1 ABC May 60 call at 2. What is his breakeven point?
It is not my job to answer your practice questions. Did you fire up a T?
You are our $11,600 for the stock. You brought in $200 for the call.
So net out of pocket $11,400 for 200 shares.
$11,400 divided by 200 shares results in a breakeven of $57 per share.