Screw RU-vid, I haven't bought my first option because nobody explains what you did. I've watched this video at least 10 times and I think I will 100 times or more until I understand every single piece. Thanks a lot.
This is still very relevant 3 years later. I have been learning so much about trading options lately. This is the first video to explain such a crucial step.
May 2024: new @ options and just learned how to buy them. Glad to find a place to show me how to sell them. Thank you; this video is timeless and priceless. Happy mother's day!
So I’m still confused why you would close out an option you wrote? You said 75% you close it, so if you collected a $10 premium if you could close it for a $7.50 (and net $2.50 profit) then you close it? My thought is going back to your first premise on Sell to Open, as long as I pick a good strike price I’m happy with then let it go to expiration? That way I keep the whole premium if it closes out of the money instead of settling for the $2.50 profit. Am I thinking wrong?
@@rickmorello454 You aren't wrong to wait for it to expire worthless. However, generally, buy to close to lock in profit is helpful because you might never know what may happen leading up to the expiration day. If you sold a call option, and as the days gets nearer to expiry, the stock flys up and this leads the premium to rises and the call option rapidly moves nearer to the money or into the money, Your profit will rapidly decrease or in worse case scenario, you take a loss instead. Then you will probably regret not closing it to lock in the profit. Likewise, if you sold a put option, and as the days gets nearer to expiry, the stock price plunges, This will also lead the premium to rises rapidly and the put option will quickly move nearer/into the money. Similarly, your profit will drop quickly and if it goes deep into the money, you will get a lot of losses. And if you don't have much time left for the premium to drop, the option Greeks will make it almost impossible for you to turn the scenario around and you will be forced to close and take losses or roll down/out the options if you don't want to be assigned/exercised.
Yooo my dilemma exactly!! I thought selling would be as easy as buying. Man im so confused about how to get out but im about to watch this video a 2nd time cuz my little brain couldn't pick it up fully. Maybe ill have bigger brain after 2nd time....
@@CantTreadOnMe yea it took me time to not just watch the video but there’s other aspects about options like, which price is safer to choose? Not just choosing it cuz the credit is higher and you’ll make more but the delta is high which means the probability of you making that isn’t high unless you’ve watched that stock for atleast a year.
@@yasssgawwwd5643 Yeah im itching to buy a call on AMC right now but I cant afford to buy the actual contracts I want cuz I bought more amc shares and I just invested all my 5k savings into crypto so now im limited to $150 I have left til payday Thursday when I add another $100 at least. Im happy with where im at with my portfolio but really want to make a play on AMC but didnt put enough money to the side to get ones I want which is $38 6/4 call and $42 6/11 call. Im just trying to figure out the selling part b4 I possibly buy 1 or 2 contracts this week. I wonder if their is a site that has options paper trading? So I can visually walk myself through one start to finish. I can find paper trading for regular stocks but not options anywhere.
I know this is 3 years ago, but really helped me and this literally is the 1st video ive found 3 years later with someone FINALLY explaining how to close. TY
That's been the reason I've waited to purchase my first option contract. I'm interest in buying option calls, but didn't want to do it without understanding my options to exit.
This is a fantastic video for anybody that is starting with options trading. I learnt so much of this by trial and error which is never a good idea. Wish this video was available when I started. Also @brad love the way you teach. You are indeed a teacher at heart be it physics or options☺️
Thank you for the video! You are the only person on RU-vid taking the time to explain these complicated strategies and simplifying them for beginner traders. KEEP UP THE GREAT CONTENT!
This is the MOST helpful video that I’ve come across! I haven’t found any that talk about closing options - not even in the course I paid for. Thank you! 🙏🏽
I've narrowed my "guru group" down to three here on Y/T. You are one of them. You all have a similar ethos as far as strategy. High probability, consistently profitable options plays with somewhat limited but consistent profits and consistent risk associated. Thank you for doing a good job teaching about this very organic yet somewhat structured subject.
Your video was put in front of me because I was looking on closing options so the algorithm is now working for you brother. Have to say I’ve watched a couple of your videos now and you do a better job than anyone I’ve ever encountered on RU-vid in terms of explaining options trading. Thank you! I will be signing up for your course.
I’ve been very hesitant to buy someone’s course. They never feel like the right fit. I think I’ve only watched maybe two of your videos at this point and I’ve already decided that I’m buying your course. Finally found it!
Thanks for the hard work making this clearer to understand. I dig your explanations more than most, you really dial in on what each term means. For those that are like me, the Buy to open/close, Sell etc is EXCEEDINGLY confusing with all this option stuff so thanks for ELI5. Sidenote: i love when the camera randomly focuses on the stuff in the background. Nice guitar!
I just started doing covered calls this week and I sold just over 1k in premium, just got into this type of trading and don't understand alot in this video but I love how you explain things very simply, letting all this stuff marinate ;-) keep up the good work, I'll keep watching!!
This is great for beginners such as myself. You answered a couple of the questions I’ve been trying to find answers to and you explained it all very plain and simple. Thank you!
I’ve seen about 7 videos from Brad so far and in every single one I’ve learned something new that I will for sure be using to help grow my portfolio. Thank you so much for this content 🧠🙏🏽
Been researching a lot about options lately and your videos have been really helpful! Especially this one as everyone loves to push spreads as a way to lower the need for capital but gloss over how to get out of them. Thanks!
Great explanation I watch it 3 times from start to end to make sure I clearly understand it before jumping to Option trading because I only know hpow to get In but getting Out is so complicated but because you explained it clearly now I'm more confident to do this in real time action. Thank for showing it in your white board very helpful.
Dude your videos are super helpful for learning basics. Also I appreciate the PBR tallboy in the background. I'm holding some options I feel good about and sold some covered calls getting close to exp and was getting concerned about it showing negative. This helped me feel a lot better about my positions
duuuuuuude! literally the most incredible aha moment ever when you said "I'll have a plus 1" and you clicked on sell to close (on the DBX example) I gotta tell you that ever since I started learning about options (1 month or so) I never understood what it meant when someone said "sell to close" because I thought to myself - how will "they" know that I am selling to close *my* position, like how will the sell connect to *my* call? reading that back, it sounds ridiculous but it had me so intimidated to try spreads! you explained this in a way that makes total sense to me. thanks! subscribed
Thank you for keeping it simple! I have been researching and spending tons of time on learning options, but no one is telling you how to exit them. Totally agree with the others, learned more here in 5 minutes than the last 15 hours I have spent educating myself. Great shot with the PBR in the background , you need to try some micro brews...up the game :)
You are very welcome Tracy. Please consider RU-vid's new "Tip Jar" in the future ( "thanks" near the like and dislike) if the videos make you a buck or two and you wanna buy me a beer! haha
Thank you for the video. I just started doing some options trading this week and was able to sell them like a normal stock trade. That seems easier than creating a new contract. Perhaps it's the same thing, but seems like less work.
Just came across your channel. I'm a new investor in options (2 months in options trading, 3 months in stocks). Although I LOVE options, they've kicked my butt more than once LOL I really enjoyed this video, despite your addressing subjects more advanced than I knew existed (so my brain had to really hang on for the ride! LoL) but you REALLY expanded my knowledge, so thank you! And you did so in such a way that even though my brain felt a little in over its depth, you explained these concepts in such a way that my brain was able to wrap around them and prep itself for the next advance. Terrific job! And thanks again!
you are a great teacher! Explained everything in less than 23 minutes. I feel I have more confidence with options. I completed a service job last week. The man had 3 monitors set up and was day trading, I asked if he was in the middle of a trade because I did not want to bother him. However, I needed to explain something about the job. His reply was "it's all run off an algorithm". He said he worked for a company and knew very little about trading. I could sense he was being honest about that and I thought to myself it would drive me nuts! Not having an understanding of what I did for a living. Maybe he had very little control... However, I want to understand or at least have a basic understanding of why something is being done.
Great Brad! Some option trainers dont even bother illustrating closing option positions which I think is most basic. You also care to share not just winning trades but losing ones as well. A good reminder that options are not always winnings.
Exceptional tutorial video. I'm brand new to options and trying to internalize the basics and strategies. You're the first Y/Tube "advisor" I've found to give these particular crucial fundamental details. Thank you.
Great information! One thing everyone needs to get from this video is the importance of setting a profit/loss trigger and close the options out. Don't get married to it
I learned how difficult it can be to get out of an iron condor when I entered both sides of the trade at the same time. Now, I open each side of a credit iron condor separately, and I look to close one of the sides for a low buy price as far ahead as possible prior to expiration to give me maximum flexibility in the trade.
I was late to this vid. I screwed up and didn’t know how to get out. My broker help line was useless. Thanks, now I know and feel better for future trades.
This stuff is still a little confusing but after watching about 50 videos, yours is the best I have seen with your stick figure drawings. Those helped a lot 😂
Awesome video! I shared this video with my brother because he was in a situation that I believe this video would benefit him after watching. Btw…this was his first attempt at options trading
Thank you so much Brad your videos have helped me so much. I sold my first CC yesterday and thought I was losing money because it's price went down when in reality I made $2 on it already. You explain things perfectly for us normal folks, thanks again!
yep! if you sell a option contract. You WANT the premium of the contract you open to drop below the premium you were paid! So that in the scenario you wish to pay to close the contract, you pay a much lower premium and thus you profit on the difference. Or of course if you option is way out of the money, you can wait for it to expire worthless and it does not matter what is the premium is at the expiration day because you don't have to pay anything and you will get to keep the full premium you were paid.
You are still the best at explaining options. I truly enjoy the white boarding, it shows that you are an educator. BTW, I am making some money following your 100% win covered call strategy. Thank you very much.
Q) In a PMCC, if the sold call becomes ITM can you just close (BTC) that position or do you need to close both positions i.e. the long/leap call and the short call? Thanks.
After searching for days on exiting a trade...finally you showed up! Thanks so much for this video, I might be 2 years behind but this is what I needed to get started!
You could make colleges shutdown with this type of content. I'm 10000% positive you help many more people more significantly than you're aware. Thank you!
This video happen to pop up but so remember when I first started researching options, no one has a video explaining this. I just learned how to exit an option a few days ago in my discord group.
Yes! Literally got into trading a few weeks ago... lost maybe $100 dollars because I wanted I jumped into some calls and didn't know how to close properly. However, I learned from it and today I closed over 600% in gains today!
very valuble ive been watching your videos getting into options...considering i think we have a bull coming up and learn how to do all of this...thank you
13:00 but let's say your share price went far above the strike price + premium, you are big time in the money, however you arr very close to expiration. That would eat into your profits right (in the sense that closer to expiry, less premium).
I'll just stick to selling covered calls. Too much stuff and risk involved. I really love that there is a risk free option to supplement div cashflow or water down c/b.
I’ve been watching videos for 2 days now and haven’t felt comfortable enough to start investing. This video changed that and I’m going to go watch a few more. Thanks.
