Beginning Option Trading Lessons
#1 / 8 Videos
Beginning Options
Lesson 1 - (10:42) Learn the basics of options and why they can be so powerful.
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Lesson 1 Quiz
What's the benefit of buying a call option?
When you buy a call, you have the right to buy stock on or before the expiration date.
What is the benefit of selling a put option?
If you're on the sale side of any option, the only benefit is the money received for taking on the risk. This money is called a premium.
When would you sell a put option?
Selling a put is a bull position, so you want the stock to stay above the strike price. This way you keep all the premium.
If a stock is trading $75 and you buy 100 shares of stock, what is the most you can lose?
The stock can only go to zero, at $75 a share, times 100 shares, that is a $7500 loss.
With stock trading at $47, you buy a 45 strike put for $3.25. How much will you profit if the stock trades down to $39?
You start to make money when the stock trades under $45, so if the stock trades down to $39, you have made $6. However, you spent $3.25 for the trade. So your profit would be $6.00 - $3.25 = $2.75.
18 replies to "Lesson 1"
Very clear explanation of options that also kept my attention. Well done!
Very easy to follow and understand content. Awesome job.
Liking it so far, clear and to the point.
Nice tutorial, keep it up
Clear and inspiring, go on!
I am please everyone is finding the course helpful!
Muy clara la explicación
Excellent, New learning… in simple way,
This site is awesome. Cant wait to work through all of the modules.
It’s Really helpful. Short and crispy
Thank you Kumar, happy to see the course is working for you.
How do I get the spreadsheet sheet template
Very understandable!
Hi Have a question about the super spreadsheet.. how do i capture the cash secured put there.. any help..
great
Great explanation and easy to follow!
I do not agree on Question 2. If you sell an Put Option, you do keep the premium, however, if it goes ITM you are exercised with more dire consequences.
Which part do you disagree with? When you sell a put option and it ends up in the money, it’s only a concern if the price drops below your breakeven point. Even then, you’re still in a stronger position compared to having bought the stock outright from the beginning.