I am glad to hear my humor translates, it is not a normal type of humor that is for sure. 🤣I love what I do and am so happy to help. Thanks for watching.
I just took and failed my SIE exam using a different study program.:( I've only viewed two of your videos and learned more than I did using the other program! I am enjoying your style much better and how you explain everything makes much more sense to me! I still get stuck on the why for selecting to Buy the Call vs. Selling a Put in the question 5 example though. Why was buying/long a call the better hedge than selling/shorting a put?
Glad you found me! So for this question you have shorted a stock, you are bearish, you hope it goes down. The risk is that it could go up. So the two options that hedge upside risk are to buy a call or sell a put. The better hedge is to buy a call because if the price goes UP above the strike price you can BUY the shares are the strike price (return them to the b/d - cover the short). When you sell a put as a hedge to a short, you have sold an obligation to buy shares for MORE than the market price (should the market price go below the strike), limiting your downside profit. Your risk on the short is that is that it could go up! If it goes up, you collected the premium on the put, that is the only offset you have to your upside risk. When you are long a stock, buying a put is better (allows you to sell the shares at the strike price) than selling a call, this only protects your downside risk by the amount of premium paid and limits your upside profit potential (as far as using options to hedge). Just like when you are short a stock, buying a call is a better hedge because it allows you to buy the shares if the market price exceeds the strike. Keep up the good work! YOU GOT THIS 😀
Or buying some. Remember that unless you own the shares selling a naked call has unlimited risk. When you sell a put you must have in cash (strike price minus the premium) times 100 to cover the sale since that is the most you can lose. But when you buy options, how much can you lose? The premium is all! Just another way to think about it! Keep up the good work. 😀
@@PassMasters Oh yeah! Definitely! I just meant that if you're trying to understand something like the complex nature of options, it's best to just jump in the deep end. I've been selling options (just covered calls) for a few weeks and just in that short amount of time it's become clear (not crystal clear, but clear enough)! Thanks for your videos! They are so clear!
On the first question if it had been JUST a put that the investor bought then the answer would be strike price minus the premium for breakeven. But, in this question it's a "level 2" option with the put being used as a downside hedge. So the inventory position of the stock is $300 and the cost of the put is $3, we call this a married put. In order for the investor to break even he has to be able to sell the stock at $303. Great question! Thanks for watching. 😀
You are the best at explaining these concepts, thank you so much for making these videos.
You are so welcome. I love helping students. 😀
I like your humor, makes all these complicated stuff bearable 😅and I won't give up.Thank you Ms Suzy R.🙏🏽
I am glad to hear my humor translates, it is not a normal type of humor that is for sure. 🤣I love what I do and am so happy to help. Thanks for watching.
I just took and failed my SIE exam using a different study program.:( I've only viewed two of your videos and learned more than I did using the other program! I am enjoying your style much better and how you explain everything makes much more sense to me! I still get stuck on the why for selecting to Buy the Call vs. Selling a Put in the question 5 example though. Why was buying/long a call the better hedge than selling/shorting a put?
Glad you found me! So for this question you have shorted a stock, you are bearish, you hope it goes down. The risk is that it could go up. So the two options that hedge upside risk are to buy a call or sell a put. The better hedge is to buy a call because if the price goes UP above the strike price you can BUY the shares are the strike price (return them to the b/d - cover the short). When you sell a put as a hedge to a short, you have sold an obligation to buy shares for MORE than the market price (should the market price go below the strike), limiting your downside profit. Your risk on the short is that is that it could go up! If it goes up, you collected the premium on the put, that is the only offset you have to your upside risk. When you are long a stock, buying a put is better (allows you to sell the shares at the strike price) than selling a call, this only protects your downside risk by the amount of premium paid and limits your upside profit potential (as far as using options to hedge). Just like when you are short a stock, buying a call is a better hedge because it allows you to buy the shares if the market price exceeds the strike. Keep up the good work! YOU GOT THIS 😀
I'm watching all your SIE stuff today. Thanks.
Awesome Joe! Thanks for watching.
The charts you draw do fit well with my learning style. The options chart is GOLD!
I am so happy to be of help! I know I have horrible handwriting (apologies), but writing charts helps me learn too! 😀
Such a great explanation on options!!! Thank you!!
Thanks so much for watching!
You are amazing!!!!
Thanks for watching Callie 😀
Hello, do you have a video for a series 9 and series 10?
I do not. Darn it!
Thank you so much for your helpful video 😍
Thank you for watching! Happy studies
Thank you! I am worried about option but got a 10/10 on these questions. Made me feel a little better.
Great job! Keep up the good work. 😀
Very beautiful and easy to understand English accent. Thank you
So happy to help! 😀
this is so easy to learn from well done
So glad to hear it is helpful. Keep up the good work and thanks for watching. 😀
What better way to learn about options than going out there and selling some?
Or buying some. Remember that unless you own the shares selling a naked call has unlimited risk. When you sell a put you must have in cash (strike price minus the premium) times 100 to cover the sale since that is the most you can lose. But when you buy options, how much can you lose? The premium is all! Just another way to think about it! Keep up the good work. 😀
@@PassMasters Oh yeah! Definitely! I just meant that if you're trying to understand something like the complex nature of options, it's best to just jump in the deep end. I've been selling options (just covered calls) for a few weeks and just in that short amount of time it's become clear (not crystal clear, but clear enough)!
Thanks for your videos! They are so clear!
ThankYou
Thanks for watching Chase :) Keep up the good work!
Too many ads though when trying to pause the question
Thanks for watching and for the feedback!
In your first question, shouldn't the answer be $297? Isn't the strike price $300 and the break even is $297? This is a serious question.
On the first question if it had been JUST a put that the investor bought then the answer would be strike price minus the premium for breakeven. But, in this question it's a "level 2" option with the put being used as a downside hedge. So the inventory position of the stock is $300 and the cost of the put is $3, we call this a married put. In order for the investor to break even he has to be able to sell the stock at $303. Great question! Thanks for watching. 😀
Awesome thanks for the content and taking the time to answer my question. I'm currently studying for my series 65.
@@NerdCrow Happy to help! Keep up the good work. 😀
Thank you
You are welcome! Thanks for watching.