Call Options Explained: Understanding Short and Long Calls
ฝัง
- เผยแพร่เมื่อ 2 ก.ค. 2024
- In "Call Option Diagrams: Understanding Short and Long Calls," we delve deep into the complex world of call options. This video provides a clear, step-by-step explanation of how short and long call option payoff diagrams illustrate potential profit and loss scenarios. We demystify the intricacies of these essential trading strategies and guide you through their practical implications in the market. Whether you're a beginner or an experienced trader, this video equips you with the knowledge you need to understand and leverage both short and long call options effectively.
Chapters:
0:00 - Call options explained
0:58 - Long call options: Payoff Diagram
5:52 - Short call options: Payoff Diagram
🎓 Tutor With Me: 1-On-1 Video Call Sessions Available
► Join me for personalized finance tutoring tailored to your goals: ryanoconnellfinance.com/finance-tutoring/
📚 CFA Exam Prep Discount - AnalystPrep:
► Get 20% off CFA Level 1, 2, and 3 complete courses with promo code "RYAN20". Explore here: analystprep.com/shop/all-3-levels-of-the-cfa-exam-complete-course-by-analystprep/?ref=mgmymmr
📘 FRM Exam Prep Discount - AnalystPrep:
► Get 20% off FRM Part 1 and Part 2 complete courses with promo code "RYAN20". Explore here: analystprep.com/shop/frm-part-1-and-part-2-complete-course-by-analystprep/?ref=mgmymmr
Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.
![[Full Episode] MasterChef Junior Thailand มาสเตอร์เชฟ จูเนียร์ ประเทศไทย Season 3 Episode 4](http://i.ytimg.com/vi/e7Oqqo90x_w/mqdefault.jpg)
![[LIVE] : ONE ลุมพินี 68 | คู่เอก "พระจันทร์ฉาย vs โจนาธาน"](http://i.ytimg.com/vi/F3IM3w-XchI/mqdefault.jpg)
🎓 Tutor With Me: 1-On-1 Video Call Sessions Available
► Join me for personalized finance tutoring tailored to your goals: ryanoconnellfinance.com/finance-tutoring/
📚 CFA Exam Prep Discount - AnalystPrep:
► Get 20% off CFA Level 1, 2, and 3 complete courses with promo code "RYAN20". Explore here: analystprep.com/shop/all-3-levels-of-the-cfa-exam-complete-course-by-analystprep/?ref=mgmymmr
best video to explain options on youtube
Thank you for that!
second that
@@joylee78 Much appreciated!
This was the best, simple, basic video! Thanks, was very helpful.
It is my pleasure!
Thank you so much, just learning about options contracts in Uni and this really helped!
Glad it was helpful! Thanks for the feedback
thanks man
God bless you, bro. Needed this.
My pleasure! Thank you
Great video! Helped a lot! What about strategies?
Best explanation ever
Best explanation, thanks!
My pleasure!
So Covered Calls are Short Calls going by these definitions..? The way I learned to do the Wheel is sell Covered Calls when probability favors the underlying security appreciating in value, and Covered Puts when depreciation is favored viz. when you expect it to go down.
thank you, the explanation is very clear
Glad it was helpful! Its my pleasure
Thanks a lot for the video, I couldn’t get this topic when a uni professor explained, so I came here :)
I have a small question. When we are talking about short call, what is the nature of the losses below zero: are they real losses (f.e. we need to pay someone) or that losses are like opportunity costs?
It is my pleasure! In a short call option, losses below zero are real financial losses that you need to pay. For example, if you sold a call option for $5 with a strike price of $50, and the underlying stock price at expiration is $60, you're obligated to sell the stock at $50. This results in a loss of $10 per share (the difference between the market price and strike price), minus the $5 premium received, totaling a net loss of $5 per share.
Got it, thank you🙏🏻
@@cvbfghrtyu My pleasure!
God damn, cant believe this is free. cant find it for money in my region)
Glad to be of service!
Thanks for the explanation. I have a quick question (sorry if it is stupid, Im new to this). Regarding Long Call Option profits, this is assuming the option is EXERCISED. So can we still profit if we sell the option at a higher strike price before expiration?
Hi @riceballdonut847, that’s a great question and not stupid at all! Yes, you can definitely profit from a long call option by selling it before expiration if its market value has increased, regardless of the strike price. This is true for both American and European style options, though American options offer the additional flexibility of being exercisable at any time before expiration, potentially providing more opportunities to profit. Selling the option can capture the gain without needing to exercise it.
Hello, thank you for this channel! Where do the words "long" and short" come from? I just don't understand why these words are used?
The terms "long" and "short" in options trading originate from general investing terminology. When you're "long" on an asset, it means you've bought it with the expectation that its value will increase, similar to holding a stock or call option anticipating growth. Conversely, "shorting" implies you're betting against an asset, like when you sell a stock or call option you don't own, hoping to profit from its decline in value.
@@RyanOConnellCFA ..... Ahhhhhhhhhh!!! That makes sense!!! Really appreciate you time answering the question. Have a great day!
@@mohammedlayes9248 Its my pleasure! You have a great day as well
so basically we should always do long call and never do short call?
Your channel is very underestimated. Thanks from Russia!
Really appreciate it! I post a lot of niche videos on topics that very few people are interested in haha
Great lesson, but..... worst handwriting ever!😂
Lol at least it still got the message across!