webmaster Posted July 21 Report Share Posted July 21 Learning OPTIONS Trading: The Basics & Beyond BEST WAY to Learn Options Trading The absolute best way, would be multimedia + in person. 1/ Watch some Youtube Videos (such as those below) 2/ Have some face-to-face Options LECTURES for those learning to Trade options, with Q&A 3/ Monitor some strategies, to see how they perform over time. 4/ Participate in active chatboard(s), when created 5/ Open an Options trading account, or expand your US acct, signing the required forms 6/ Trade in small size, and Learn-by-doing ( I am willing to participate in some of these discussions; and give some advice.) 7/ Start a small Options Investment Club. Maybe (A Carrot?) === RISK: Options prices can be far more volatile than Underlying Assets, so a usual rule is to : NOT risk more than 2% of your Risk Capital in a single trade Link to comment Share on other sites More sharing options...
webmaster Posted July 21 Author Report Share Posted July 21 STARTING OPTION Trading - some Videos (The Basics - in just 10 Minutes) Options Basics for Beginners CALLS: "Right to Buy" = Controls the Upside (above strike) PUTS : "Right to Sell" = Controls the Downside (below strike) KEY Terms: to know for every Option PRICE : of Underlying asset PREMIUM : Cost of the Option, normally paid up-front EXERCISE, or Strike Price, at which the Option holder can Buy the stock (for a Call), or Sell the stock (for a Put) TIME : Time to the Maturity, or last exercise date, for the option. VOLATILITY : The expected variability of changes in the future, for underlying asset Other items determining an Option's price: Interest Rate. Dividend YOU CAN PLUG these items into an Options Pricing Model, to determine its price. RISK is Higher: Options prices can be far more volatile than Underlying Assets, so a usual rule is to : NOT risk more than 2% of your Risk Capital in a single trade Link to comment Share on other sites More sharing options...
webmaster Posted July 21 Author Report Share Posted July 21 If the above Video was Too Fast, here's a slower explanation of the BASICS Part 1: Options Trading Explained Part 2: Options Trading Explained - COMPLETE BEGINNERS GUIDE === Some other NOTES, per MH: OPTIONS can be like insurance, protecting against rises or falls. Alternatively, give big leverage (& risk) for those who seek it. Key things: Exercise Price, and Date, carves out a price and time range into the future where option holder is protected - ie Option control the future price movements. For Calls, the lower the strike, the more “upside” you can get, so it comes at a higher price. And if the time frame is longer, the option will also cost more. For an ATM (At The Money, where the exercise price is the same as the current stock price) Option, the value will increase with the Square Root of Time. So a 4 month ATM option will have 2X the value of a one month option/ Option premium, can be separated into INTRINSIC value, which you could get by exercising the option at the current price. And TIME value, which is an additional amount you pay for future volatility, but cannot be extracted at the current price. The more Volatile is an underlying asset, the more the Option is worth; ie the more Time value it may have. Link to comment Share on other sites More sharing options...
webmaster Posted July 21 Author Report Share Posted July 21 EARLY WARNING: Over-Confidence in Option Trading can destroy your wealth Looking ahead / TIPS for those who want to Trade Options successfully in the long term OPTIONS trading is high risk, and there are Big Pitfalls, that even beginners should know about as they Learn to Trade... If you keep trading, eventually you will learn about this. Best to listen to this early, and BE AWARE as you progress./ PSYCHOLOGY MATTERS, and WINNING Streaks do not Last... Trading in Size can create big emotional stress ("you will freak out" if you get a sudden big drawdown ) Options Trading Tips: Ten Things I Wish I Knew Before I Started Trading Options === The WINNING Streak Over-Confidence Trap, is in my mind now, as I look at my Crypto related Options Portfolio... BTC vs. CALL Spreads Port. (SSprP) Date : BTC : CSprP: Ratio : Mara : Riot : EndApr: 60.6k 26.9k: 44.4% 16.06: 10.11 : EndMay 62.0k 33.0k: 53.2% 19.52: $9.74: EndJun. 61.0k: 45.7k: 74.9% 19.85: $9.14: Jul.19th 67.3k: 69.7k 104.% 24.73: 12.03: + Chg. +11.1% +159% ==== +54% +19%: Jul.26 67.4k: 58.6k 104.% 21.57: 11.20: + Chg. + 0.1% -16% ==== -13% -7%: I started this portfolio /SILO, and this latest stage of my crypto related trading with about $27k, and I have already put aside profits of about $10k - it is included as part of the $70k valuation - that's a 159% profit in about 3 months. 44% of a BTC, became 104% of BTC value over that period. ==== MORE TIPS, from the Comments under that Video… @margaritasbunny / 1 year ago Becoming a good trader takes time (experience), and patience. When i first got into trading i was liquidated twice, and lost my entire mortgage deposit. I could have given up, but decided to learn how to trade and put it into practice. 4 years later and i am glad i made that decision. @AlanGuo / 4 years ago 1. when you start feeling invincible, get very, very scared 2. you have to grow into trading large amounts of capital 3. live trading is not the same as back testing 4. be consistent, but don't be foolishly consistent 5. the decision that makes you feel better almost always hurt you 6. successful traders know how to control their losses 7. have a diversification of strategies in time, volatility, price 8. keep it simple 9. practice patience 10. the market does whatever it wants, whenever it wants to. (preach) Link to comment Share on other sites More sharing options...
webmaster Posted July 27 Author Report Share Posted July 27 TEMP Notes: Using Puts: Clorox example, > scroll down: / 2 / Barrick GOLD : $17.79 == Using Options: limited RISK, more leverage Date == : GOLD : Intr.V : Sep$13C* Dec$13C: Jan$13C: 05.03.24 : $16.46: $3.46 : = = : $4.02 : $4.21 : June ’24 : $16.25: $3.20 : $ 3.52 : = = : = = : 07.12.24 : $18.52: $5.52 : $ 5.70 : $5.80 : $5.90 : + chg, : +12.5%: +59% : +61.9% +44.3% +40.1% : 07.26.24 : $17.79: $4.79 : $ 4.85 : $4.95 : $5.00 : + chg, : +8.08% +38% : +37.8% +23.1% +18.8% : : ===== > scroll down: Link to comment Share on other sites More sharing options...
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