Buying Call Options Smarter

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Timestamps.
00:00 - Introduction
00:45 - Core Concepts of Buying Options
- Introduction to three key concepts: Days to Expiration (DTE), Delta, and Gamma
01:31 - Days to Expiration (DTE)
- Explanation of how the length of time until expiration affects option price and behavior
- Longer time frames mean more expensive options due to extrinsic value
- Slower Gamma movement in out-of-the-money options with longer expiration
04:01 - Delta
- Understanding Delta: Measures rate of change of an option’s premium per $1 move in the underlying asset
- Higher Delta means more expensive options but better responsiveness to price changes
- Delta and Gamma relationship and their impact on in-the-money and out-of-the-money options
06:01 - Gamma
- Introduction to Gamma: Rate of change of Delta
- Gamma is higher in at-the-money options and as expiration approaches
- Impact of Gamma on potential profit from options with high Delta closer to expiration
09:31 - Practical Application and Platform Demonstration
- Demonstration using GameStop options to illustrate discussed concepts
- Practical examples of selecting options based on DTE, Delta, and Gamma
- Examination of 60 Delta call options and their behavior over different expiration periods
12:00 - Advanced Considerations
- Further exploration of strategic considerations in options trading
- Benefits and trade-offs of higher Delta options
- Scenarios demonstrating the impact of Delta and Gamma on option profitability
15:01 - Summary and Best Practices
- Summary of key points to consider when buying options
- Importance of balancing Delta, Gamma, and DTE
- Practical tips for minimizing losses and optimizing trades

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Опубликовано:

15 июл 2024

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Комментарии : 48

@chrismarkenson2755 24 дня назад

finally someone who knows wtf hes talking about sub this man and like hes the real deal if you want to make money

@esInvests 24 дня назад

right on brotha!

@cryptato8563 22 дня назад

Yes sir, this is Mr Options IMO. I can't wait to learn more! I'm a noob, and am so excited about learning this stuff. It's got a very Calculus vibe to it.

@Brunoku 24 дня назад

This is the exact video I was looking for earlier today lol

@esInvests 24 дня назад

little late but right on time hahaha

@cryptato8563 22 дня назад

@@esInvests Sounds like a Greek symbol trade-off.

@AZDevil321 20 дней назад

This is exactly what I was looking for. So well explained and the examples really help me better understand how to interpret the different Greek's. Invaluable, thank you!

@esInvests 20 дней назад

Right on!

@greggo129 23 дня назад

Also, would it be possible for you to do a 0DTE video, explaining the which Options you would buy and why?

@esInvests 23 дня назад

I have a playlist on 0DTEs you can check out - but the process of trading them successfully is a bit nuanced.

@greggo129 23 дня назад

Really appreciate your insight and knowledge Erik! I am learning so much. Question for you…wouldn’t you be better off buying the 7/19 $21 C as opposed to the ATM $24 C as they have the same Gamma, but a higher Delta?

@esInvests 23 дня назад

If you’re optimizing for delta and gamma, then that would make sense.

@davidjas2378 22 дня назад

This is why we wind up donating our hard earned money to Kenny and Doug making them richer than they are. Not even going to mention about the corruption. We need to trade smarter. Thanks.

@esInvests 22 дня назад

They have enough money already so let’s save and grow ours :)

@cryptato8563 22 дня назад

I donate my money to this channel. hehe

@SirMika9 8 дней назад

This goes a bit too fast for my beginner level and I need more understanding on the basics, but I am really impressed by how easily and fast you explain all that. It's only usefull stuff without loss of time compared to other channels where they take 1hr to explain 5 minutes useless stuff. I will watch your other videos for beginners ! Thanks for sharing man ;)

@esInvests 8 дней назад

hahaha yeah i tend to try and keep thing as dense as possible, sometimes too dense

@jesse5909 24 дня назад

Good info 👍🏻

@esInvests 24 дня назад

Glad it was helpful!

@A-Negative 24 дня назад

Thanks! Still a bit lost on some of the Greeks mainly due to most brokerage platforms are so simplified they don’t show them number wise (probably for good reason) and mainly had trouble understanding the compounding strat using two options but overall you explain well.

@esInvests 24 дня назад

i hear you, it takes a little while to pick up all the nuance. just give it a little time and repetition.

@relil9121 24 дня назад

Thanks for all the videos they are really insightful and helpful. What software do are you using for your videos?

@esInvests 24 дня назад

this platform is thinkorswim

@maple913 24 дня назад

I think you said load up on GME calls so that's what i did before close today. Held the 23.85 support

@esInvests 24 дня назад

hahahaha

@JosueRodriguez-li5zs 24 дня назад

GME covered calls!

@WiseOwl-1 24 дня назад

I tried to join the Discord, but I see a message that I “must complete a few more steps before I can talk”. I try to click on the arrow to continue, but nothing.

@esInvests 24 дня назад

interesting, i just checked the flow and it works fine

@WiseOwl-1 24 дня назад

@@esInvests- It’s on my end. I used different emails to create accounts on RU-vid and Discord. So, your invite is linked to my gmail and my discord is my ICloud. Oh well.

@mudibluz2006 24 дня назад

In your old playlist you talked about purchasing deep itm call leaps with high delta (0.9) and low theta decay (0.01). Do you still think it's a good strat to use? This video makes me questioned if I should purchase ATM call leaps instead of deep ITM for the lower cap requirement, mid theta decay, higher gamma and mid delta and more time to work. How many days would you keep on a winning position if gross theta decay erodes a lot of value in the contract for leaps? Thank you.

@esInvests 24 дня назад

All up to the trader and the thesis. For long-term trades, going further out in time makes sense. For shorter-term holds, there's no real need to go quite as far out in time. I use a wide range of entries based on the exact thesis I'm trying to trade.

@m1lspec 21 день назад

Thoughts on using a Synthetic Long position to offset the ATM call premium?

@esInvests 21 день назад

If there's a plan for the downside risk, works just fine

@cryptato8563 22 дня назад

🙇‍♂️

@esInvests 22 дня назад

Thank you so much! Really appreciate this!

@ramizzunic8366 24 дня назад

👍

@freemygrandma8752 20 дней назад

It’s so freaking stupid that options decay over the weekend when the market is virtually paused sick of the little fuckkin games. And they always got some fancy justification on why that happens. It makes me sick man. They can drain my money over the weekend. I should be able to sell my freaking option over the weekend.

@TARANS012 22 дня назад

Is there a way to have stop lost after hours ? That's where lose most money when stock crashes after hours and it doesn't sell

@esInvests 22 дня назад

Have to check with your broker but many over EXT orders that trade in extended hours.

@CoyoWyWy 9 дней назад

You say that you like to buy your long call contracts at least 60 days out. Generally speaking, is there a cap on how far out you like to buy them? I know it would be very situational but in general is their a sweet spot such as 60 days to 6 months or something like that? Seems like there's a sweet spot where the cost per contract is reasonable and the amount of movement the contract can achieve is reasonable. If I'm understanding right when the contract is a leap it's price doesn't increase nearly as much as the underlying due to low gamma.

@esInvests 9 дней назад

Realistically, the sweet spot revolves around the strategy itself and the expected holding duration. Shorter holding duration, less DTE needed. For the last part, that’s partially correct. However, what happens if we buy an option with a 1.00 delta? In that case, gamma doesn’t matter (wrt gamma expanding to help our position) because delta is already as high as it can get.

@CoyoWyWy 9 дней назад

@@esInvests Thanks for entertaining basic questions. I'm deep into getting a handle of the basics and appreciate the info! I see what you're saying about It depending on the overall strategy. There's so many variables that change with contracts all at the same time. Getting closer to wrapping my head around it but not there yet.

@kevinsorichetti42069 19 дней назад

lol

@JayjayTang 17 дней назад

Only problem is everything else behind you is way too small. I hear you talking but literally can't see anything you are doing behind you on the screen.

@esInvests 17 дней назад

Interesting. I checked in my phone and it seemed fine if turned sideways. The platform itself is pretty dense. I’ll see if there’s anything I can do!