Options 101: EASY MONEY w COVERED CALLS - showcasing a real trade, and how I nail Asymmetric Bets!
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- เผยแพร่เมื่อ 7 ก.ค. 2024
- #OptionsTrading #OptionsStrategy #JETS #ETFTrading
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DISCLAIMER: InvestAnswers does not provide financial, investment, tax, or legal advice. None of the content on the InvestAnswers channels is financial, investment, tax, or legal advice and should not be taken as such; the content is intended only for educational and entertainment purposes. InvestAnswers (James) shares some of his trades as learning examples but they are only relevant to his specific portfolio allocation, risk tolerance & financial expertise, may not constitute a comprehensive or complete discussion of such topics, and should not be emulated. The content of this video is solely the opinion(s) of the speaker who is not a licensed financial advisor or registered investment advisor. Trading equities or cryptocurrencies poses considerable risk of loss. Kindly use your judgment and do your own research at all times. You are solely responsible for your own financial, investing, and trading decisions.
Timestamps:
0:00 Introduction
0:30 Low risk trade that's easy to do. The covered call..
1:02 The future is exciting because I believe sometime this year we will have a bitcoin ETF that will have options capability.
1:50 Showcasing a real-life case on the $JETS ETF and how to safely make 103% on your money in less than 120 days.
2:00 Did Charlie Munger principle of inversion. Problems are easier to solve in reverse.
2:55 Call Option defined
3:30 Call Option Math
4:16 Covered Call Option defined
4:46 Covered Call Option Math
5:16 The three things you need to know. Knowledge margin and options authority
6:56 The five option authority levels in detail
7:20 Practice before execution. Paper trading is critical before you go in with real money.
8:20 Volatility VIX drives the options pricing. Let the VIX be your friend.
9:12 bets and where I like to play
9:30 My comprehensive approach to finding asymmetric bets focusing on risk management research and quantification
10:29 Why it is important to build your trading thesis
11:55 Chart analysis
12:20 More Technical Analysis Identifying upside and downside
13:10 My custom Black Scholes models to help identify market pricing inefficiencies
13:50 My simulation model that runs over 300 simulations that covers a wide variety of outcomes both good and bad.
14:30 My jets ETF trading results from the covert call. We dive deep into the math in great detail.
16:48 We cover the loss-making scenarios for this trade and position.
17:50 Conclusion: How to drive passive income earned 5 to 10 extra normal stock returns protecting your downside but also remember you kept your upside.
Thank you - วิทยาศาสตร์และเทคโนโลยี
2 things to know about guys like this. One, they will be the end of the traditional college education. Two, this amount of knowledge, disseminated for free, will make the world a more equal place. Thank you for being that (presumably) rich guy that doesn't just hoard your knowledge and wealth. I hope to be able to do the same at some point in time.
I've said this for a while. TH-cam University is just around the corner :)
You're a rare find man, someone that truly understands how to behave sensibly and make rational decisions when others lose their head or have itchy trigger fingers. You are truly showing us how to earn and, more importantly, learn. Keep it up :)
Appreciate that. Cheers
A little complex but I'm gonna rewatch a few times. These are gold man and you're a champ for making them
honored Peter. Hit me up w any Q's. I am going to do many follow ups - a starter vid (as I got some complaints it was too complex) and a 102, 103, 104 etc - you will all have PhD's in Finance soon.
@@InvestAnswers also very interested, thanks!
@@InvestAnswers thank you so much man God bless you
@@InvestAnswers You are the real deal James.
@@InvestAnswers Yes, I'll watch (and re-watch) them all. Thank you. I'm learning as fast as I can.
I just want to say I love your videos. You are honest, intelligent and you really are helping this community. You don't grift or sell your videos with hype, you just stick to the math. I am an Amateur stock/crypto guy but I strive to learn from you! Please keep making these videos. HUGE thank you!!!
I appreciate that!
Big +1 on this. Thanks again James.
Hilarious!
“I do a lot of naked stuff “ :)
Gave me chills when he said that! Scary stuff for mere mortals, this guy is a genius!!
This example and the knowledge you have provided is an outlier in the sea of you tube coaches/traders that are just trying to sell a course and and take your money. Thanks you for all the good info and most of all demonstrating integrity.
Just watched this for the second time after a few days and finally makes sense 🎉 will watch the whole series again and start paper trading. Thanks for such amazing content James!!!
I feel like there is hope for me to learn something that was formerly out of reach. I really like your style of teaching. The way you give insights of motivation on each side of a trade makes things clearer. It is obvious you have experience and true experience is what is lacking from other influencers. Keep doing what you are doing! :)
You are so welcome!
Watched for a second time and it's now making more sense. Thanks so much for the wonderful content!!
I cant tell you how good your videos are, so in depth and informative. I have always kept away from options but you do make it sound very simple. Thanks for you work and thanks for sharing.
Glad you like them!
This is my favorite of your videos so far. Please keep the education coming!
Thank you! Will do! Cheers
I have traded bull put spreads but lost my nerve and had kids so couldn't handle the risk. After watching these types of channels for years now, you stand out so well done and your attitude of sharing your priceless experience is awesome.
That means a lot. Time for you to get back in the saddle, start small :D - however a crash will happen in 2021.... just not sure when. But when it happens it will yield great opps. Cheers for the super kind words.
@@InvestAnswers What kind of crash ? Like as big as the dotcom crash? How low in your professional opinion do you think btc will get ? May I ask what your lowest strike is set at from now until the end of 2021?
13:55 Nice! Don't know if you know this, but that kind of random sampling is called the Monte Carlo method. 📊
This is pure gold for me, James. Thanks much. After I watch this another ten times or so, I'll look for Options 201 or 102. Hopefully you got enough positive feedback that you made this a series. You're a blessing, bud
Thank you!
Find your content extremely valuable
I came across this video and it’s interesting to see the evolution of you James between now versus then
Thanks for explaining this so well! I like you keeping it simple and clear.
You're very welcome!
Thank You. for me It's a bit over my head, but I can always rewatch it again and again, (and I will). Thank You for taking the time to make videos for us.
You're very welcome!
...."I do a lot of naked straddles and strangles".... Hehhehehehehehehehe.
OMG yes on re hearing it - sure came out a bit funny.
Love your videos, can’t wait for the more advanced strategies!
Glad you like them!
Thanks so much for this comprehensive breakdown. You have a rare skill to explain things in a simple manor without using jargon. Shows your true understanding. Question, how do we see your models?
No dislikes!! Proof that the quality of the info is awesome!
Thank you for pointing that out. Only four of my videos have 100% positive likes. Sometimes I touch on subjects that hurt peoples feelings and it causes them to react badly especially around sensitive issues like storing crypto, shorting gamestop and such. But I come from a Pareto universe so even if 20% were dislikes it wouldn't bother me. As long as 80% of people like it :D cheers
@@InvestAnswers That's true, some people cannot be objective because of their feelings, Thanks for all the information, I'm learning a lot.
Awesome. Covered Calls and Selling Puts. Thanks for sharing your knowledge. This information is so hard to find.
Glad it was helpful!
Sir you may have one of the best investing channels on TH-cam.
Wow, thanks
Thanks for sharing this - I’m just dipping my toes into options and am hoping I can learn to do this consistently to replace my employment income. 2021 will be a great year for learning!
Glad it was helpful!
I wish I knew enough about trading to take advantage of this mans knowledge, I feel he is 100% real and sincere in what he is teaching
Of course I am :D - I literally put my money where my mouth is :D
I feel the same way. I’m determined to learn as much as I can.
Thanks for this James! I would love to see more of this kind of trading instrument info video from you!
It is a whole new language to get used to and u do a good job of explaining it in a way that I can understand..Cheers!
Lol James! "Will introduce u to naked strangles and straddles - if you have the appetite!"
Hahaha that made me giggle
Great video explaining the basics of covered calls. Looking forward to other options videos
Awesome, thank you!
Thank you for what’s basically free education. This is a good paper trade exercise for the next couple of months, since we have uncertainty about a possible market correction. Wouldn’t want to loose real money because of that.
Yes I expect a market correction also so I'm moving to a lot of short positions and cash
just signed up for your Patreon capitalist. Will need to watch this vid a few times
Merci beaucoup James . J’ai décidé de tenter de comprendre .
Hi James, could you show us how the calls actually interact with the market? I mean the strikes and how they capture funds from a stock price.
Great video.. I've always wanted to start with options.. Covered calls seems to a good place to start
They are! But please do your homework. Ping me with any ideas or Q's. Cheers
Just about right. Great video - as always! Thanks
Awesome, thank you!
I will paper trade till I hit 90% and then try the real thing and thanks so much for all you do ! When I get what I need to retire I will support you as much as I can you do a great service!
How did it go for you? This example seems to be more of a home run than a typical trade, that could be found every month or so.
Yeah, how did you do?
Good stuff. Options theory and TA are relatively easy to learn but my challenge has always been the fundamental analysis (macro/micro) as I'm not from the finance industry. I think a lot of us would pay someone to provide that side of things, hint hint...
I get the hint, you are not alone. Folks want to see my trades live. Working on a system for that but people need to be acutely aware of the risks.
@@InvestAnswers gave me shivers when you said "I do lots of naked stuff!"
Knowing my exit points before entry is something I struggle with the most
Great channel! Thanks! How much time goes into research vs actual trading? How long do you generally stay in options/calls/puts? Interested in your spreadsheets/models to evaluate your positions before you trade. NS. Video on your background, jobs, trade successes and failures, whether retired or not, etc would be interesting. Keep up the great videos.
A life time. We never stop learning and have to continually stay abreast of all that is going on. Market is getting very frothy and irrational so more than ever you need to keep your finger on the pulse. I am slowly hedging my long positions with shorts and moving other positions to cash.
You’re a master ! Thanks tremendously
You're very welcome! Very humbled.
Great video! Thank you for sharing your knowledge and time with us, much appreciated.
Glad it was helpful!
more options! this is just about right! Not too basic nor too complex
Perfect thank you for the feedback on that.
Just about perfect for me, thanks James
Great video!
I’m after the painting on the wall! Painting on options101 video :)
Wonderful!
@@InvestAnswers who is the artist??
Well done. Keep ‘em coming.
Thanks, will do!
Hi James! Patreon member here! Thank you for all that you do. I've learned so much already. I am trying to re-create your spreadsheet to practice the calculations. However, it would help if you could share the options model. Would you be able to? Thanks! =)
Great content! Finally I am learning about calls and options after I had excuse (it's too complex and difficult) for so long. Thank you so much for the great great content!! One thing I don't get it after watching it twice: how the cost of call for selling the stock at 22 is considered? Or is there a cost for that?
This is out of my comfort zone, but I appreciate it anyway!
It's worth taking a second look at because it's a sure fire low risk way to make good safe money.
thanks! Really interested in miners. Just took a look at the hut 8, criminally undervalued! looking forward to hearing what you think
Been researching them and MARA. can you answer me a Q - why did MARA buy Bitcoin when they mine it? Or are they simply not good at mining? And where did they source the $150M from as a year ago they only had $6M on their balance sheet?
this was great info, a little complex, a few more examples would be amazing! thanks
Noted!
Would love to see more of these options videos James this is great KPM!
It's the 3rd time I watch this video. Amazing.
Love from Italy
Glad you enjoy it!
Great instructions.
Glad it was helpful!
Loved it .. just about right. Thank you
You are so welcome
good learning , thank you ,
Brilliant! I missed this one somehow 🙌🏻
Hope you enjoyed it!
Great content! Thank you!
In your example, do you sell the stock and buy back the contract when it hits $22? If not, don't you run the risk of the stock price falling before expiration and reducing or eliminating your gains?
I will probably just close out stock when it spikes and then buy the calls back on a dip. Alternatively I could wait for option expiration and they just take delivery of my stock (I do nothing)
AMAZING, THANK YOU SO MUCH!!!
You're soooo welcome!!
I’ve heard these are safe way, but I couldn’t follow the 103% profit. 😢. Really appreciate the work and style. I’ll. Review this more. Excellent point on the Paper trade as a Must.
Great content, could you cover how you setup your spreadsheets as well? Ty!
I have so many models on spreadsheets - which ones?
Great job on all your research and putting it to paper. takes alot of dedication and discipline. I appreciate it!! subscribed. I do have one question though. When will the Etherium ETF be coming out? or is it out already?? def buying some options!!
No, there are no bitcoin or ETH ETFs as of yet. It is largely due to the unregulated nature of bitcoin and the cryptocurrency market, which makes the bitcoin market easy to manipulate by investors with large holdings. The U.S. Securities and Exchange Commission (SEC) has to approve and they dont know which way is up right now.
Would hate to be on the other side of your trades! Great work man!
Remember it's a zero sum game. Thank you for your comment
Can we access your tools? Is that a paid member thing?
This video is amazing
I bought LEAPS in SAVE. They have a relatively pretty balance sheet.
Excellent video, James. Just started to learn about this. Are you obligated to keep the shares? Let's say the price goes down below $22 and you confident it will keep going down, can you sell the shares and buy back at lower price?
Please more of this - more advanced from this
You got it - and thanks for watching!
Great video thanks !
You are welcome!
GREAT TEACHER
Hi mate thank you so much for your content. I would love to learn your method. I have to say this video was a little over my head. I usually buy etf and crypto but this video was difficult for me to understand despite that. Maybe if you broke it down and explained it a bit more it would be easier. Also do you have a discord server? Thanks again for your phenomenal content
I will do that. I don't have a discord server but I will look into it
It is great video James az always.
I appreciate that
Great content. I'm a sub. What would you recommend as stock buying platforms for international investors?
very interested in this topic but this was a little over my head. can you recommend some other videos or maybe a book that explains options trading even more simply? what’s quant? really enjoy your videos. keep up the good work.
Quant is Quantification using my own pricing models and calculations. Will dig. I just know tis first hand.
Thanks for the great content. Were there the promised follow-ups to this video? I searched for 102, 103, 104 etc. but couldn't find the series. Thanks in advance.
..weird.. I was thinking bitcoin mining, ARB,Riot, Hut8 then you literally said it. It's a sign I need to learn call options. Will subscribe and try follow your help to the word. Happy to work together, think there is an obvious hedge here.
When I analyze the mining companies it paints a very scary picture. I was interested marathon because they spent $150 million on bitcoin but I don't know where they got the money and their cost basis is $32,000. Will continue to dig.
BTW I love your channel - nice presentation, quality and excellent content...I live options - my strength I might say...
D you use the SMA or EMA when looking at moving averages Do you look at 50 day and 200 day? Thank you
Hello James, Thank you for these types of videos!
I had a question when buying a call how far out do you give your self till it expires?
sorry im new to this and might not be asking the right question.
Thank you James!
Haha who knew investing could be so sexy? The naked stuff sounds quite kinky.. strangles and straddles 😂
On a serious note, thank you James.. you along with Ben Cowen and Sheldon Evans have been a Godsend to me this year. Please keep up the great work. Happy new year to you Ser and look forward to more amazing gains in 2022!
Hello! What books would you recommend for the start in options?
Thank you for this video. Is there a place to download your slide shows? They are so helpful.
Very helpful. Would love to do one with you on Patreon Capitalists.
“I do a lot of naked straddles and strangles.”
Yeah you do
Fantastic videos! Any of your spreadsheets available for download?
You are a bit mysterious but at the same time super cool. Nice videos and greetings from Germany
Geheimnisvoll! habe das noch nie gehört. Ich bin so froh, dass dir das Video gefällt.
Thanks for the information I was able to follow along. What’s your best tool you would recommend for paper trading options
Pen and Paper, Google Sheets, TC 2000 or Think or Swim by Ameritrade www.tdameritrade.com/tools-and-platforms/thinkorswim/desktop.page
Re-reviewing this, probably ready to get one right
Great information... could you go over a “roll” because someone like myself... wants to keep the asset and don’t truly want to sell the asset being held. So learning how to roll the call would be greatly appreciated. Definitely understand placing it out of the money.
You mean what I refer to as roll ups? Sure I can do that
@@InvestAnswers yes sir! That’s what I meant! Thank you
in selling covered call it is a bearish strategy what i understood . so i will want the price of stock to remain under the strike price at the expiration. so the option expires worthless and i keep the premium. so at the expiration if the price goes up above my strike price , the buyer of the option wins and i have to give away the stock. you said if the stock fells 20% profit is break even ! got little confused . thanks if you like to clarify please
Hey James , we need more on options ... Please please please ...
I understand most of what you're saying, certainly in theory, it makes sense.
I do get quite perplexed when I actually log into an exchange though. What am I looking at, what every icon means and what the candles actually mean, why would I change the view from candles to a line, whats the difference. It's a bit much when you're used to just buying and selling crypto with a literal "Buy" and "Sell" button with the current price and graph right above. You would consider that simplistic, and it is, whats the best way to learn, is every exchange different, what are the common components and how do you operate them.
Just letting you know what I struggle with. Great stuff though I'll not miss any videos from here on in, cheers!
Do you have a patreon? Your videos are top quality.
I don't. But thanks for the idea.
@@InvestAnswers defiantly make one, I'll give you money for the time you invest into your videos.
@toombz11 thanks so much for your support! Just got a new Patreon account: www.patreon.com/InvestAnswers
New sub here. New to crypto too and I’m loving your approach. Ex stockbroking/banking background but from risk and compliance angle. Unable to work now so looking at home options so let’s see what I can learn hey🤷🏻♀️
Do I detect an Irish lilt??
Thanks for subbing!
what data source u use to feed options data to google sheet, thanks.
You said you use tools to run simulations and to research. What are some or all of them? Thank you very much.
On the relationship between the actual stock and options, can large amount of options also have an impact on the actual stock ?
Do you have the simulation models on google sheets? or excel? or is that copyrighted info? Thanks Sam
Thank you for sharing much appreciated. Is it correct that recently there are bitcoin futures, and if so can these be manipulated to effect quoted price
yes and everything can be manipulated. Hence you need to do your own calculations :D
Omg going to try this but , my head is scrambled ... paper first like you said
.😮
Thank you, could you consider doing a video on MARA? They also put a bit of Bitcoin on their balance sheet.
They sure did however I do not know how they came up with $150M. last I checked they only had $6M in assets on their balance sheet. Trust but verify :D