Outstanding video explaining the importance of trading small so your edge can yield big results in the long term. Use of analogies and visual aids along with clear explanations makes this a great presentation.
This is absolutely the best presentation I have ever seen for options writing and understanding the process. Well done Kirk! Superb presentation. I’m an option seller since many years and it’s so good to refresh my basic concepts with videos like yours!
You say in your videos that you mostly teach "selling options'. Doesnt this take alot of margin? For people starting with 5 or 10k, this might be a problem. I have TOS and I dont really understand how much margin I need to sell options
Nope - you can use credit spreads and make trades that only require in some cases $60 of margin and are defined risk. Therefore, you can sell options even if you have $3k in your account or less, of course understanding that your not going to quit your day job with this amount of capital.
Sir great video but I don't understand few things. Like in an insurance there have to be huge no. of buyers for insurance company to make money. Same way here we are the insurers. But we will be selling a single contract(may be 10) in a month that to at a same price. What if price of stock shoot up higher than that value. We will loose in all of them. How is that sinerio taken care of. As you said that if IV is high we should sell contract . But in this scenario changes of us loose will be more as price movement will be more. Similarly in case of Low IV as price movement is very low , chances of us loosing oney will be high as there are more chances that price will not cross the strike price
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Outstanding video explaining the importance of trading small so your edge can yield big results in the long term. Use of analogies and visual aids along with clear explanations makes this a great presentation.
Glad it helped John!
This is absolutely the best presentation I have ever seen for options writing and understanding the process. Well done Kirk!
Superb presentation. I’m an option seller since many years and it’s so good to refresh my basic concepts with videos like yours!
Just beginning to learn this. I actually understood. Thank you.
Great video. Thank you for sharing your knowledge and wisdom.
great stuff great teacher
You say in your videos that you mostly teach "selling options'. Doesnt this take alot of margin? For people starting with 5 or 10k, this might be a problem. I have TOS and I dont really understand how much margin I need to sell options
Nope - you can use credit spreads and make trades that only require in some cases $60 of margin and are defined risk. Therefore, you can sell options even if you have $3k in your account or less, of course understanding that your not going to quit your day job with this amount of capital.
I see. What would be a healthy amount of capital, assuming you know what your doing. to "quit your day job" and do this full time
Depends on your income level needed to live - just reverse divide roughly 20% by your required income per year and you'll get a rough estimate.
Sir great video but I don't understand few things. Like in an insurance there have to be huge no. of buyers for insurance company to make money. Same way here we are the insurers. But we will be selling a single contract(may be 10) in a month that to at a same price. What if price of stock shoot up higher than that value. We will loose in all of them. How is that sinerio taken care of.
As you said that if IV is high we should sell contract . But in this scenario changes of us loose will be more as price movement will be more.
Similarly in case of Low IV as price movement is very low , chances of us loosing oney will be high as there are more chances that price will not cross the strike price
That's where position size matters which is why we never have a position over 5% allocation