Ep 75: Trading Options: The Real Way Money is Made from Options

★ SUMMARY ★
In this episode, number 75, what I’d really like to do is go into some basics and just give you some more insight, some ideas about how options are traded.

Over the last couple of weeks I’ve been busy filming an options course, and I’m still working on that course, there’s a lot of material that I’ve been working on but, I do realize that I haven’t really focused a lot on sharing some insight and wisdom at least on the Thursdays lessons here on the webcast that we do, about options

And there’s a few different reasons for that really. One of the reasons for that is because options are very different from trading stock.

Trading options is different than trading stocks
They are a little bit more complicated, in fact quite a bit more complicated if you don’t know or don’t understand what you’re doing. So the risks can become much greater if you are unknowledgeable and if you are unaware of the consequences and the risks.

There are of course great upsides, so options really were invented for risk management and proper risk management with options, can actually give you a lot of advantages if you know and understand what you’re doing.

The problem with options, with most people is that they don’t know what they’re doing, and when you don’t know what you’re doing, then that’s really when you can burn your account and blow your account up and have a lot of damaging consequences when you don’t know and understand what happens when trading options.

Don’t read this if you’re a beginner
If you are just joining me, if this is the first time you’re listening to these let’s talk stocks sessions, or the lessons then I highly recommend you actually don’t watch this lesson, don’t listen to this lesson, go and get the basics, go to the website tradersfly.com and just go to the training section and get some of the basics and fundamentals.

Once you’re in this training section, when you get there, there’s going to be a lot of different lessons in here that you can just go and browse to, such as the wall street basics and terms. Even the trading basics and fundamentals, technical analysis basics, money and risk management basics. All these things will help get you started on the basics and fundamental level.

Once you do get into some core material and you’re starting to understand things and you want to trade options, what you could do is go through some of the videos that I’ve already created such as these little shorter videos, and go through them and learn some of the basics behind trading options.

Just search for “trading options”, or “options” and you’ll see a lot of different videos that I’ve already created, so I won’t be covering exactly all these basics in the sense of going through the basics of these option videos, I’m not going to go in detail about every single one of these things that I’ve already covered in these videos.

Posted at: http://tradersfly.com/2016/03/trading-options-real-way-money-is-made/

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Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.

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26 COMMENTS

  1. HEY Sasha.
    Great video. 1 question. Im a scalper Intra day trader. If i buy a (short)put for 50 cent and sell the put 1 hour later for $1 am i still locked into that trade? I see you said the seller is still committed to the trade after the sale ?

  3. I am a beginner on option trading. But this help me to explore other ways to do instead of single spread. I like the way of protection can be done. Will learn the best way slowly. ?

  4. Sasha, very good and educational videos. You have proven how powerful calls and puts can be. One thing I have noticed is that, it seems to utilize these tools effectively, one would have to have very high margin or cash accounts. Besides that, Buying Power needs addressing, as well as (P/L).

  6. Great video !! I want to trade options of nifty50 index in India, can you please advise which software I should use if you have any students from India. I haven't found any software like the one you are using.

  8. One of the best options vids I've found. I like how you don't just say "sell an vertical credit spread" or "buy a calendar" but you show how they are built one leg at a time, plus explaining decay to show WHY the risk profile graph looks like it does. Very helpful, thanks!

  9. Lazy f***ers
    How can a lazy person teach others???
    Even Bill gates wakes up every single morning 6am and goes to the office work with passion!!!!
    Don't forget Bill gates 80 billion dollars and he does not have to wake every morning and go to office????

  14. Great video. Finally we know a bit more about premium. But how to collect premium ? How to close contract with profit from premium or delta when you have calls and puts on one contract. Can you show this on think or swim?

  18. excellent excellent Video Sasha and always appreciate your hard work on these video. And it's great that you do this option video on the THINKORSWIM platform. It would be fantastic if one day you can do one video on the thinkorswim platform re some important useful features of the risk profile and trade analysis function….many thx. Keep up the great work

  19. excellent clear teaching video on a complex subject. Hi Sasha I already trade calls and puts but interested in other strageties as suggested. What is your view about buying straddles before earnings release? I find the profit around earnings do not always cover losing leg. Welcome your thoughts. Thanks

  20. i love all your videos, but this option video was very confusing..maybe because im new to options and there was too much information lol.. in addition, using big loss amounts in the thousands – scared the crap out of me .lol i'm sure typically when a person is starting out with options, their risk is much less – in which made it hard to relate ..thanks sasha

  23. thanks for taking the time to make this video for us sasha! i have one question. is it possible to use those different strategies like the iron condor. with index option (Europe option)?. and when I have profit from a iron condor. how do I collect it?

  25. I like how you explain and put these topics into simple terms along with examples so that noobs like me can understand. I'm still gathering knowledge on investing. I have a question about strikes and their spreads. Lets use the AMAZON options for example at @5:38 As we can see, the stock is trading at $558.93. What I want to know is this: what would be the benefit of choosing a call (or a put) option that are further away from the mid-strike points. Say I wanted to BUY a call, why would I choose the 500 strike with the ASK price at 65.10 as opposed to the 550 with the ASK price at 28.40? What are the risks regarding each call?

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