New to options? This is the place to begin. In this video, we take a broad look at what options are, beginning with stocks. We’ll look at some options analogies, and how you can benefit whether the stock/market goes up or down. We’ll also learn some of the option lingo like calls, puts, strike price, expiration date, and option premium.
In this video…
:45 - Overview of Stocks
2:19 - Intro to Options
3:01 - Analogy of Buying a Call
5:24 - Shorting the Market
6:54 - Option Lingo
8:54 - Recap
Review:
With stocks, one invests by buying shares of a stock, hoping that the stock will increase in value. Options allows someone the option to buy a stock at a given price (strike price) by a certain date (expiration date) for a price (option premium). There are two types of options - calls and puts. We would generally buy a call or sell a put if we were bullish (we think it’s going to go up) on a stock. And we would buy a put or sell a call if we were bearish (we think it’s going to go down) on a stock. Options are extremely risky but also generally offer much more upside than buying stocks. While there’s a variety of options trading strategies, in the Trade to Live program, we’ll mainly be focusing on a very specific strategy called Vertical Credit Spreads placed on an Index.