Huge project! I hope this video explanation helped you better understand how call options work. ✅ New to options trading? Master the essential options trading concepts with the FREE Options Trading for Beginners PDF and email course: geni.us/options-trading-pdf -Chris
Welcome back, Chris. You are the best option teacher of all time, IMO. I have been trying a lot of option strategies. I am having a lot of success with debit call vertical spreads in bullish trends. Still struggling to find the optimal option strategy for bearish trends. ITM puts are too risky and lose too much in bear rallies. Debit put spreads are not mirror image to debit call spreads. They underperform on the short run with crashes, because the rise in IV with crash limits profit potential. What are your thoughts?
Hey Chris, at your convenience, can you make more videos tailored to determining the best entry point for long-term short option sales? I really enjoyed your video on the VIX compared to other volatility indices and I would like to learn more on that topic including how best to lookup short, medium, and longterm volatility.
I know you work hard on making these videos, Chris! Although I understand and apply all these concepts, I am still interested in watching every video from start to finish. Great work as always. I regularly recommend your vids to newbie on reddit so I hope to see you get to 500K subs soon!
Thank you Evan! Yes, the past two videos were huge projects. I appreciate you watching this video even though you know the stuff. I added a lot of visuals and explanations in this video from the last 'calls for beginners' video many years ago. Thanks so much for your support!
Hey Chris. Hope you don’t mind a quick recommendation on your excellent videos. It would be fast to do (me thinks) after stating any question, add a freeze frame and in that frame add “pause video to answer question yourself”. Then when the viewer starts the video again, they can compare what they thought the answer was to your answer. I do it anyways but sometimes it’s hard to catch before the answer is given. Thanks again for your clarity of explanation!
Great video and lot of work in it as always! I wanted to ask you if you could make a video on black-swan hedging via put-ratio-backspreads for someone who just selling CSP vs. credit spreads vs. teenies? Something in that direction would be awesome!!
Thank you for sharing this. I need a new refresher summer brain drain with kids I guess😒 thank you for always updating your videos for beginners. Your top-notch.👍🏻
This video has made me understand call options in trading. Option trading is gradually getting popular in the crypto market and with the recent Lyra listing on MEXC global and their The Newport upgrade that allowed Lyra MMVs to partially collateralize short positions with cash which removes the need to swap to the base asset and instead using perpetuals to collateralize and delta hedge.
Chris, would really appreciate if you could do a video regarding which one is better if you were bearish: bear put spread or bear call spread based on IV...etc.. thanks
@@projectfinance, Referring to the basic stock price and dollar change, they are there, but not the percentage move for the day. I noticed Tasty rarely has the % on the screen, I believe it's only in one place. Even when Tony says to Tom a stock moved $8 dollars, we don't know the percentage move unless you know the stocks price. Hope that makes sense.
There is no doubt that the explanation is quite clear, however, if the lecture goes a little slower and like conversation type. Sometime there''s no time to think and you just move ahead assuming we all understood.
Great explanation! watching as many of your videos I can. I assume for higher profits, you want high volume and decent volatility? Because waiting 39 days to make $280 isn't ideal, but was a good example to showcase everything.
High vol means the stock moves around a lot more and isn’t necessarily better than low vol when selling options. My research (and others) has found the opposite. It’s also good to keep expectations realistic. Not making “enough” money in a time period is a common pitfall that nudges traders into riskier bets that can cause big losses with a high probability.
what are the expiration/assignment rules For options that are expiring on Friday, for example if I sold a put for a strike price 1.5 and it closed at 1.49 but after hours it goes 1.5 , will I get assigned on Monday because it closed at 1.49 or it will expire worthless and i collect the premium since after hours it went to 1.50?
Chris: I'm bewildered by your examples at 4:19 and at 5:30; your diagrams in both places are labeled "105 Call", but the 105 call is never mentioned in the discussion. How is the 105 Call involved with the trade? What am I missing? [Next, at 6:01, the topic is labeled with "Prive" rather than "Price".]
Hi Chris, What about the option cost 1200$, do you have to pay it as soon as you place the trade or you have to pay only a portion for the 39 day you had the trade opened? when do you exactly have to pay this option cost, when you place the trade or when you close the trade or on daily basis?
You pay it immediately to open the trade. Then the value of the option fluctuates after you enter. If the option price is higher later you can sell it for a profit. If not, you lose money.
question is the strike price? the price i must sell at or can it go over and i can sell there? or can i only sell at the strike price lets say $100 $ not over or under that price?
Yes, you can set an order to sell your call option at a specific price. The specific date might be a bit harder and probably requires using the brokerage API (if available) to create auto-trading strategies.
If it's in-the-money and you hold it through expiration, you'll auto-buy 100 shares per call contract at the call's strike. Example: you have 7 contracts of the 100-strike call and the stock is $105 at expiration. You hold the options through expiration. You will automatically purchase 700 shares of stock at $100/share, or $70,000 in total stock value. It doesn't matter if your portfolio is worth $10,000. You will autopurchase the shares and be left with a massive negative account buying power and need to close the shares immediately, or your brokerage will do it for you. However, it's worth mentioning that some brokers will automatically close ITM/near-the-money options on expiration day to avoid this situation.
tastytrade: info.tastytrade.com/tasty-offer? They have awesome options trading commissions and features. Simple platform to learn even though it will take time to learn any platform. If you sign up and fund your account with the above link you can get their funding bonus + free access to my paid course if you're interested! Chris
Hi, I have IBKR cash account. Don't like margin accounts, I like to work with my own money. I had an intention to buy calls the way you explained, without shorting other calls. On the IBKR there's somthing I don't understand and it's called "legs" Can i just buy calls and see how it's going to play out? Thanks
Project, what makes the value of a option contact double? I do know that a contract can increase to move of a delta to about a dollar but can double at certain points. Do you know why this occurs?
An option contract increases in price a lot (2x, 3x, whatever) when the likelihood of it expiring in the money increases dramatically. In the case of calls, that means an increase in the stock and/or big increase in volatility expectations (synonymous with a big increase in option prices not driven by a stock price change).
So let's say apple is at$150? And I think it will go to 200 in six months. Is it better to buy a call at 150 which I think is called a in the money or is it better to buy a call at 200? Which will give me the most money?
Technically if the stock goes from $150 to exactly $200 at the end of 6 months, the 200 call will expire worthless since the stock isn't above $200. But if you bought the 200 call and the stock went from $150 to $170 or $190 within the first month or two, you could make a lot of money (as seen in the AAPL example with the OTM 180 call). So of the two approaches, the 150 call would be the safer bet to make if you thought the stock was going to $200 in 6 months, but you'll pay a higher price for the 150 call than the 200 call since it has a much higher probability of expiring with value.
That’s for long call spreads when the stock price goes to the short calls strike. At that point you want IV to go down as the spread will increase in price from the extrinsic coming out of the short. For a long call by itself you always want IV to go up.
I'm sorry to hear that! Can you please send me a video example of one the voice sounds better so I can compare them and see what I can do? If you are willing, I would appreciate it.
Why tastytrade? Why not thinkorswim? Does tastytrade has better option analytic tool than thinkorswim, especially probability of profit feature that thinkorswim doesn't have?
Huge project! I hope this video explanation helped you better understand how call options work.
✅ New to options trading? Master the essential options trading concepts with the FREE Options Trading for Beginners PDF and email course: geni.us/options-trading-pdf
-Chris
Thank you!! I've been hoping to see more content from you in 2023. I really want to learn this.
You got this! More videos to come :D
Welcome back, Chris. You are the best option teacher of all time, IMO.
I have been trying a lot of option strategies. I am having a lot of success with debit call vertical spreads in bullish trends. Still struggling to find the optimal option strategy for bearish trends. ITM puts are too risky and lose too much in bear rallies. Debit put spreads are not mirror image to debit call spreads. They underperform on the short run with crashes, because the rise in IV with crash limits profit potential. What are your thoughts?
Thanks for doing a video specific to call options. A minor correction: I noticed that price is spelled as prive (v instead of c) at 6:00
@@karthikramanathan5390 thanks! Can’t do anything about it now 🙁 always miss something in all these graphics
Out of all the videos I watched. You explained this the best 😄🤗thanks
Glad to hear that and thank you for watching and letting me know!
Hey Chris, at your convenience, can you make more videos tailored to determining the best entry point for long-term short option sales? I really enjoyed your video on the VIX compared to other volatility indices and I would like to learn more on that topic including how best to lookup short, medium, and longterm volatility.
I know you work hard on making these videos, Chris! Although I understand and apply all these concepts, I am still interested in watching every video from start to finish. Great work as always. I regularly recommend your vids to newbie on reddit so I hope to see you get to 500K subs soon!
Thank you Evan! Yes, the past two videos were huge projects. I appreciate you watching this video even though you know the stuff. I added a lot of visuals and explanations in this video from the last 'calls for beginners' video many years ago. Thanks so much for your support!
Watching ALL your videos now,, 1, 2, 3 etc,, but don't know enough to take your course, YET. Will be taking it in the future
Very clear and easy to follow. You're a very good teacher. Thanks for posting these!
Thank you for watching and the comment! I appreciate the feedback.
Hey Chris. Hope you don’t mind a quick recommendation on your excellent videos. It would be fast to do (me thinks) after stating any question, add a freeze frame and in that frame add “pause video to answer question yourself”.
Then when the viewer starts the video again, they can compare what they thought the answer was to your answer.
I do it anyways but sometimes it’s hard to catch before the answer is given.
Thanks again for your clarity of explanation!
Great video and lot of work in it as always!
I wanted to ask you if you could make a video on black-swan hedging via put-ratio-backspreads for someone who just selling CSP vs. credit spreads vs. teenies?
Something in that direction would be awesome!!
This is such a good video for explaining things. You have a gift for teaching.
Thanks so much!! 😀
@@projectfinance I agree that you explained this very well.
Thank you for sharing this. I need a new refresher summer brain drain with kids I guess😒 thank you for always updating your videos for beginners. Your top-notch.👍🏻
Thank you! better videos coming soon!
This video has made me understand call options in trading. Option trading is gradually getting popular in the crypto market and with the recent Lyra listing on MEXC global and their The Newport upgrade that allowed Lyra MMVs to partially collateralize short positions with cash which removes the need to swap to the base asset and instead using perpetuals to collateralize and delta hedge.
Thanks. This has been my best example of option trading to date. Very detailed and easy to understand. Thanks again.
Thank you Melvin! I’m glad it was a great help to you!
Hi Chris, Great video. I do have a question. How do you exercise your right to buy shares before the expiration date or can you?
you're so good at making me understand the process! Thank you
Happy to help!
This is incredibly helpful! Thank you for walking us through your real life long call as an example. 👍🏽
Thank you for the feedback! I figured the real example would help a lot.
Thank you for all your information. I have a question, what broker do you use for trading options?
Chris, would really appreciate if you could do a video regarding which one is better if you were bearish: bear put spread or bear call spread based on IV...etc.. thanks
Great easy to understand video - Ok - I understand the basic concepts - Do you have a live class or just the videos ?
I have old “live” stream videos on my channel which you can find by going to my videos and filtering for live content.
@@projectfinance - thanks so much for your reply- I will definitely check out your site. 😀
Thanks for detail explanation and keep repeating so I understand.
You're welcome! It's all about repetition
Thank you so much for this excellent video !! I'd like to see in a coming video and explanation about the Greeks. Thanks in advance.
Great suggestion! Thanks for watching and commenting feedback!
Great video! ? What is the significance of Friday ?The preferred day to buy ?
Excellent video, I’m curious why Tasty rarely shows the percentage of the actual stock price?
Thank you! What do you mean exactly by the % of the stock price? What metric are you interested in seeing?
@@projectfinance, Referring to the basic stock price and dollar change, they are there, but not the percentage move for the day.
I noticed Tasty rarely has the % on the screen, I believe it's only in one place. Even when Tony says to Tom a stock moved $8 dollars, we don't know the percentage move unless you know the stocks price.
Hope that makes sense.
Keep Teaching, I'll keep learning, Thanks.
Thank you, Chris
Thank you Chris! ❤️
You're welcome!
Great vídeo!! Could you tell it isso possible to sell call option from IVV Etf? It is liquid ? Tks
There is no doubt that the explanation is quite clear, however, if the lecture goes a little slower and like conversation type. Sometime there''s no time to think and you just move ahead assuming we all understood.
Hi Chris, do you know when your Options trading for beginners course will be ready ?
Great explanation! watching as many of your videos I can. I assume for higher profits, you want high volume and decent volatility? Because waiting 39 days to make $280 isn't ideal, but was a good example to showcase everything.
High vol means the stock moves around a lot more and isn’t necessarily better than low vol when selling options. My research (and others) has found the opposite. It’s also good to keep expectations realistic. Not making “enough” money in a time period is a common pitfall that nudges traders into riskier bets that can cause big losses with a high probability.
what are the expiration/assignment rules For options that are expiring on Friday, for example if I sold a put for a strike price 1.5 and it closed at 1.49 but after hours it goes 1.5 , will I get assigned on Monday because it closed at 1.49 or it will expire worthless and i collect the premium since after hours it went to 1.50?
Chris: I'm bewildered by your examples at 4:19 and at 5:30; your diagrams in both places are labeled "105 Call", but the 105 call is never mentioned in the discussion. How is the 105 Call involved with the trade? What am I missing?
[Next, at 6:01, the topic is labeled with "Prive" rather than "Price".]
Hi Chris, What about the option cost 1200$, do you have to pay it as soon as you place the trade or you have to pay only a portion for the 39 day you had the trade opened? when do you exactly have to pay this option cost, when you place the trade or when you close the trade or on daily basis?
You pay it immediately to open the trade. Then the value of the option fluctuates after you enter. If the option price is higher later you can sell it for a profit. If not, you lose money.
@@projectfinance Is this same with all the trading platforms? IBKR etc?
@@gsjonline Same idea and steps but different interface
Thank you so much 🙏
You're welcome 😊
Awesome, Bro, keep going ,,,
Chris, on your website I see a beginners course with exercises "coming soon", is this no longer available?
Great video!
Thanks!
Outstanding presentation
Thank you! 🙏🏼
No lie the breakdown is always made so easy to understand like he doesn't overcomplicate he doesn't over do it - true goat
Can you do a video explaining pros and cons buying long OTM calloption and selling weekly cover call on it?
good stuff thanks
question is the strike price? the price i must sell at or can it go over and i can sell there? or can i only sell at the strike price lets say $100 $ not over or under that price?
You can sell over the strike price.
Thank you.
You're welcome thanks for watching!
Can you set the option to sell automatically if you reach a certain gain, a certain loss, or by a certain date?
Yes, you can set an order to sell your call option at a specific price. The specific date might be a bit harder and probably requires using the brokerage API (if available) to create auto-trading strategies.
Do we have to buy stock if we don't sell the option on the expiration date?
If it's in-the-money and you hold it through expiration, you'll auto-buy 100 shares per call contract at the call's strike.
Example: you have 7 contracts of the 100-strike call and the stock is $105 at expiration. You hold the options through expiration.
You will automatically purchase 700 shares of stock at $100/share, or $70,000 in total stock value. It doesn't matter if your portfolio is worth $10,000. You will autopurchase the shares and be left with a massive negative account buying power and need to close the shares immediately, or your brokerage will do it for you.
However, it's worth mentioning that some brokers will automatically close ITM/near-the-money options on expiration day to avoid this situation.
10:12 the dude called himself a numnut in his review LMAOOO 🤣🤣🤣🤣🤣🤣
I am a beginner. What trading platform do you recommend?
tastytrade: info.tastytrade.com/tasty-offer?
They have awesome options trading commissions and features. Simple platform to learn even though it will take time to learn any platform. If you sign up and fund your account with the above link you can get their funding bonus + free access to my paid course if you're interested!
Chris
Hi, I have IBKR cash account. Don't like margin accounts, I like to work with my own money. I had an intention to buy calls the way you explained, without shorting other calls. On the IBKR there's somthing I don't understand and it's called "legs" Can i just buy calls and see how it's going to play out? Thanks
I have enough funds (over 25k) for option trading
Project, what makes the value of a option contact double? I do know that a contract can increase to move of a delta to about a dollar but can double at certain points. Do you know why this occurs?
An option contract increases in price a lot (2x, 3x, whatever) when the likelihood of it expiring in the money increases dramatically. In the case of calls, that means an increase in the stock and/or big increase in volatility expectations (synonymous with a big increase in option prices not driven by a stock price change).
@@projectfinance thank you sir for your explanation!
So let's say apple is at$150? And I think it will go to 200 in six months. Is it better to buy a call at 150 which I think is called a in the money or is it better to buy a call at 200? Which will give me the most money?
Technically if the stock goes from $150 to exactly $200 at the end of 6 months, the 200 call will expire worthless since the stock isn't above $200.
But if you bought the 200 call and the stock went from $150 to $170 or $190 within the first month or two, you could make a lot of money (as seen in the AAPL example with the OTM 180 call).
So of the two approaches, the 150 call would be the safer bet to make if you thought the stock was going to $200 in 6 months, but you'll pay a higher price for the 150 call than the 200 call since it has a much higher probability of expiring with value.
Do you ever sell puts? Or you are only buying calls?
I remember you saying that it's preferable for the IV to go down once a strike is ITM.
That’s for long call spreads when the stock price goes to the short calls strike. At that point you want IV to go down as the spread will increase in price from the extrinsic coming out of the short.
For a long call by itself you always want IV to go up.
Thank you!
What kind of app is easy for option trading
Anywhere to contact you directly ?
Next video should be on Put Options.
Yes I need to do that video soon!
😊😊😊😊😊😊
👍🏼👍🏼👍🏼👍🏼👍🏼👌🏼🎉🤓
Why does your voice sound so different? I like your "old" voice more. it was easier on the ear and you also spoke a little slower.
I'm sorry to hear that! Can you please send me a video example of one the voice sounds better so I can compare them and see what I can do? If you are willing, I would appreciate it.
Confused here…you risked 1,200 dollars for a profit of 285? That don’t sound like much of a good risk to me? What am I missing?
Can I get permission to download your videos to watch offline 🤔
Go for it!
Thank you
Why tastytrade? Why not thinkorswim? Does tastytrade has better option analytic tool than thinkorswim, especially probability of profit feature that thinkorswim doesn't have?
Very clear and easy to follow. You're a great teacher. Thanks for posting these!
Thanks so much!! I appreciate the feedback.