💎Sign up for Robinhood and get a free stock! - robinhood.c3me6x.net/rjg4j **UPDATED VIDEO FOR 2020** ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-SD7sw0bf1ms.html Important corrections below: -The strike price of a call option is what you can buy each of those 100 shares for, not what you can buy all of them for . I misspoke in the beginning. -I made a mistake when talking about puts: puts do not have infinite profit potential since a stock's price can not be less than zero. It is capped.
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I've watched several Option trading videos in the last few days and this is the best one by far. Simple and to the point. Good examples. Well explained. Definitely earned a sub and like!
So if I buy an option & end up in the money and want to profit do I ever actually need to have the money to exercise the option (buy the 100 shares at the option price outright) or will Robinhood allow me to trade and profit with only the money tied up in the option and not the full price of all the shares?
@@BeatEh3 I do a lot of successful and unsuccessful trades through my Robinhood Challenge series, although I'm not sure I have recorded me taking profit through reselling the option. In an upcoming video on the newly released options stops, I do a live options trade where I take profit using the stop. Should be out within the next couple days. Thanks for reminding me of this :)
@@InTheMoneyAdam if you have a video selling a call on robinhood, can you send me that link, or title of the video. (Not the "SELL" tab) Thanks. I think you know which one I meant. I can't find anyone on RU-vid that has bought a call, and then sold the call, showing their profit. All I see is people buying calls, and that's it. Like, where did the other half go? Lol. I know you mentioned how to do it in this video, but a visual would be super helpful if you can. Thank you so much. This is the best beginner options video. Trust me, I've searched. Needle in a haystack, but this is it. Great job! Also, do you have a video on options and taxes? If I make money with options, how much tax is taken etc. Is filing taxes difficult with options? Thanks again.
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Couple questions; 1) when you say “sell an option” is that the same as “exercising” the option? 2) when you say “sell an option to another buyer” is that the same as (selling a regular stock equity) I.e., you just click sell and it gets executed. Or do you actually have to (find) a buyer...is it possible that there may not be any buyers? 3) is “selling & exercising” an option the same thing? 4) do you ever just let the option expire if it’s ITM? Or do you need to (sell or exercise) it to maximize profit? 5) lastly if one can buy an ITM call at a premium and turn around the next literal minute and sell it back for a premium, WHY isn’t everybody just buying hundreds of thousands of ITM call options and selling them right back to make that premium? (Sorry in advance if these are dumb questions) I’m just trying to learn this stuff
Thank you! Thank you! Finally I found someone who really knows how to teach this detailed information properly. I have been searching around RU-vid for months searching for someone to teach me this. I don't know anything about options, and all of the information that I had found was simply rambling. Excellent teaching ability. Please keep making lots more videos. Thank you!
Best video on RH options. Thanks. My Roku call was 75% up yesterday but today it was only at 60% even on higher stock price. I know the answer now. It decays with time. Subscribed.
I've been working with stocks for about a year now but I'm watching your video trying to learn options... But I must say I just checked ADM and today's price is like 80 some dollars. Anyone who would have bought this stock when this video was made would have made a lot of money with a hundred shares and just sat on it. I learn a little something everyday. Thanks for the video...
Stock is the oldest online market we done in the past years, we employ it because of the highest quality services it renders and how successful it is. Today we say crypto currency too, I'm just saying that people should develop the habit of investing, really helpful in life.
@@martineddie8054 It depends on the trade as Bitcoin and the rest of the cryptos are really volatile. Many people do bitcoin mining through which they earn a good amount of money. There is no particular answer for it in figures. But, yes cryptocurrencies carry high risks and need proper risk management otherwise it can cause huge losses.
Due to my experience in the market and in all my years trading the most valuable insight I made was getting into with a pro Trader like Robert Anderson. Ever since I started investing with him I have been making cool profits like never before.
Great video! I understand why my calls and puts on spy can go down at the same time, damn IV drops With stock price going sideways, you get hit with theta and IV if you bought at a higher IV
This explanation video seemed to make more sense to me than others I have seen. I think I finally understand it better. It also seems like the opportunity to interact with expensive, big name stocks is a better possibility buy options rather than stocks. Also seems like options trading, even if done on a frequent, but small profit scale, is more lucrative.
Let’s see if I get this. So for an option trade say the stock is at 15.35 Do I buy a low call if I think the stock price will go down? Like 14.00 And I buy a high call if I think the stock will go up? Like 16.00 So. My question is. Let’s say I buy high and the stock price jumps to 16.35. Should I sell that high call?
If you think the stock is going up, you buy a call. If you think the stock price is going to go down, you buy a put. The lower the strike price of the call, the lower your break-even is on expiration day, so the greater your probability of profit. These calls will be more expensive, but will have less leverage than cheap out of the money calls (there's a lot more leverage in buying a bunch of cheap OTM calls, but the probability of profit is low since your break-even is so high and Theta really bangs these suckers up).
I am so thankful for this video and your unbiased information. This is so hard to come by when learning so thank you for your time! The lines were very satisfying lol
You nailed it 🙏 quick question what do you think about trading both ways? Buy calls and puts as well? And do you recommend buying more contracts if my contract going down?
Thank you for making that “sell” clarification! I have been so confused by that (sell) because you hear people talk about selling options but they will turn around and say don’t sell that’s different ( by definition and other factors) etc...so for a beginner it really throws you off and confusing.
Thanks for the video. Ive watched a few hours of different folks trying to explain options and finally after watching your video I understand how to buy a call or put and what it actually means.
Great video for this Newbie..... Thanks for Breaking it All Down in such a simplistic Way...You My Friend is of Great VALUE to the Investment Community Thank... Greatfull I AM
Wow! Thanks for this vid...best job at explaining this for “noobs” ive seen so far. A lot of vids say for beginners, but they talk so fast through the explanation and kinda skip steps. Thank you so much because ive been doin it totally wrong!! 🤦🏾♂️
Thanks for your effort. The recording quality is also on point. You somehow manage to explain things a lot better than many other option tutorials out there. Because I'm only just familiarising myself with options here's a few noob questions: 1. So when a call expires, no matter whether there's a loss or profit, does it mean the option is exercised? 2. If I manage to make money, does it get deposited straight back into my RH balance? 3. Are there any penalties / fees on selling the option conventionally? Could you maybe briefly demonstrate you buying and selling an option in the future? Cheers again. Keep it up!
1. It will only be exercised if you have the capital or 100 shares in your possession. If you do not, RH will try to sell it for you on the last day. If it is illiquid, then the option will expire worthless and you will have lost your premium. 2. As the premium grows, that value stays within the option until you sell or exercise it. Any profit realized through one of these two methods might have to settle, but should quickly be deposited into your RH account balance 3. Not sure I understand what you mean by conventionally, but there is no fees/penalties for selling options as far as I'm aware.
@@InTheMoneyAdam and be careful of popping "P"s when talking into the mic. A screen can help a bit, but try talking over the mic. (From an audio tech😉)
Definitely helped to watch this video in two viewings -- you've got a lot of knowledge to share and a lot of information to cover, gotta make sure to get it all in the ol' noggin! Thank you for taking time to make this, you've helped me understand more about options
No problem! I released an updated version of this video yesterday which you might find interesting, there's a little bit more information in it: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-SD7sw0bf1ms.html
Hey Adam, just the other day was introduced to options trading by a friend. So I've been studying up and came across your channel. I appreciate your style of presentation and how easy it is to understand what you're teaching! Thanks and happy trading, looking forward to catching up to more recent content of yours.
Novice question.. if the stock goes up and is ITM should I sell before the exp date? Not sure if there is another option.... Also.. when you say before the exp date.. does this mean the contracts exp on that day @ market close or open? Thanks
Wow! You are so on point. I’m a new self learning trader and I have learnt a lot from my personal experience. However, I learnt way more than I expect in this short video. I just subbed. 🙏🏼.
Rather than guessing, do like I do. Get one call and one put and have them spaced apart like an 8 dollar call and a 10 dollar put. That means that no matter what happens (no movement is worse case) you still have 10 minus 8 = 2 which is $200. Depending on your expiration (I would typically use one month) and then at the end of the expire date, transfer to the next month options. But you could also buy two months out. Obviously the stock went as high as 19.30 a share, so even though you lost everything on the put, you made far more on the call. I hate to guess.
Thats good. You never know on any stock. I remember an article of news on AMD from "Seeking Alpha" that actually recommended shorting AMD when it did dip down to $9 a share. Personally I've never shorted in my life. I use Puts instead where the loss is limited to what you paid for the option.
