OPTIONS TRADING FOR BEGINNERS ๐Ÿ“ˆ How To Trade Stock Options


70 thoughts on “OPTIONS TRADING FOR BEGINNERS ๐Ÿ“ˆ How To Trade Stock Options

  1. Special thanks to Justin from Road To The 2 Comma Club for making this options trading video for beginners. He is documenting his journey of building up a seven figure trading account. Make sure you subscribe to him and thank him for making this video!

    Justin's Channel: https://www.youtube.com/channel/UCrnF9GyCjvh0i47eD_XPRWg

  2. Thanks so much again for allowing me to explain options on your channel! Quick note for the viewers, I forgot to talk about "out of the money" so I had to put it in when editing so it shows up real quick but if you pause the video you can read it and hopefully it should make sense. I'm also a little behind on my vlog but will be uploading a ton of videos this week/weekend so you'll have lots of new content to watch ๐Ÿ™‚ Thanks again super grateful for you guys! Hope you like the video!

  3. I'm stunned….like I just watched a 50 wagon train barrel into 10 school buses full of children, derail and hit a chemical plant that released toxic gas and killed the entire town type of stunned. …..like….where to begin….

    1. Buying options is a terrible investment in the long run, it is usually used in concert with other trades in order to protect positions or make synthetic ones. For example, buying stock and buying a put protects the stock from falling, but just buying a Put will surely see a downturn in your account eventually.

    2. Why is buying bad? Well, simply put, stocks usually have market makers that position price spread. When these market makers have increased volume throughput within a small time scale during the day, they normally will reduce their individual trade position per strike, which leads to the stock moving at a faster pace…..which also increases the "ATR" (average true range), and subsequently, the volatility of the stock itself. When volatility goes up, option prices go up based on an elliptical curve, and this is reflected in the extrinsic price of the option. This means that if a stock is moving around too much, then options will be overpriced, and since most market makers base their intrinsic on black-scholes formula, options are never underpriced.

    There's usually a strategy where you buy options when IV% is less than 7%, but it hardly happens, and the profits are very slim….compared to waiting for a stock to hit over 20% IV and sell the options instead.

    3. NEVER Buy/Sell at market (MKT)…..that's terrible practice. Naturally stock spread is very small, but option prices have a big enough gap that you can actually squeeze quite a bit of money out of a trade just by setting a limit instead. You also never know how many "lots" have been set at the price you are looking at (in the example of the AAPL split option order, some were bought at price X and the rest at price Y)……this means that you could have a guy selling at much higher than you expected behind the "wall" price, if you smash through that wall, you'll end up paying that guy's price for the rest. This is usually the same pitfalls as stop orders being run over by quite a distance.

    If you need any help with options, managing risk, taking profits, etc., just ask…..I've always wanted to a youtube howto, but I have stage fright.

  4. Hey man, What do you think about SNAP? Do you think it is worth investing in? I got in at 21 but it went down a good amount.

  5. Great video! I did not know what options were until now and will try them out.

  6. Hello Ryan!
    I want to start with investing in a fund. Its called MS INVF US Advantage A. It says that after a period of 3 years it gives you a +93,8 return on your investment. I am trying to find 2 or even 3 funds i can invest around 1,000 dollars in each. And then monthly or every 3rd month i will put in 2-300$ in each funds. So I wont "only" invest 1,000 dollards and wait 3 years. I have no hurry and im in it for the long run. Do you think this type of investment is a good or bad choice? And have you ever heard of the fund "MS INVF US Advantage A"? I think almost 100% return in 3 years seem alot, but judging from the growth rate it seems like you can make a lot of money with this fund. I also found a lot of others that has a growth of 30-70% over 3 years. Would that be a better or more secure fund? Note: I only invest money i have saved up and can afford to lose, but of course i am hoping to make money =) Thank you!

  7. Lol that Amazon Call. Already way in the money on that one. In that case, would you sell th contract or wait for expiration and buy the shares?

  8. Finally a video that explains Options in English.ย  Thanks. Big thumbs up.

  9. Bro, thanks for the explanation of stock options. You made it very easy to understand

  10. I traded options for a while but there is way too much babysitting and it was getting on my nerves having to keep track of my portfolio constantly. Portfolio volatility is ridiculous, and dont even get me started on theta decay.

  11. Thanks for the vid. You made everything really easy to understand. Been trading for over ten years now, but always like you did when you started buy simply buying, holding and selling. Now all I see and hear about is options. It was time to finally learn and your video helped a lot, so thanks again. I do have one quick question though… how do you figure out what your option will be worth if it goes over the strike? So say I buy 1 call option contract of apple for Oct, 08, 2017 with a strike price of $150.00. The ask is $5, so I pay $500.75 total. I understand that I can lose the total amount, but how do I know how much I will make if it goes above the strike price?

  12. Hey Ryan I'm setting up a Tradeking account and was wondering if you could make a video or point me in the right direction as far as the new account process. Not sure if I should pick balanced, growth & income, growth, max growth…etc. thanks!

  13. oh boy this is gonna be interesting best of luck too all you traders the market is squeeing everylast penny off the streets this is a good sign i have seen it before

  14. Greatย  video I starting to trade options and im going to be following you

  15. Nice, so he's basically up 75% so far on his 9 AAPL oct 20 call as of this comment. Ive watched countless videos on options and this one is very useful. He's the first i've seen do a live trade. I Appreciate the insight. Thanks

  16. WOW awesome video..love the break/down of how options work. Keep up the good work!

  17. In February I bought a very honest book explaining the types of shares and strategies etc and one of the most serious things the guy said was 'Only invest in Options if you know exactly what you're doing. With Options you can lose more than everything in your life.'
    And that's very true, yet I still think this is the most interesting way of stock investment as long as you're staying on the ground

  18. Thank you for this video. I've watched about 15 videos and yours is the only once that broke it down in a way to make it easy.

  19. Your guest was incorrect in his AAPL example in that you can't lose more than what you paid for the contract (plus fees). He does not have the obligation to purchase anything further. So, if the price of AAPL plummeted, and his contract essentially became worthless, he would allow the contract to expire, walk away, and lose the $265 (plus the small fees) he purchased the contract for. In his example that his contracts raised in value, he would (or could) have sold them when they became valued at $6.20, yielding $620 (minus fees). So, he risked $265 to gain $355. Furthermore, it is theoretically possible for the stock price to keep increasing in value. Were that to happen, the options price increases, first in a linear fashion, and then closer to expiration it goes up exponentially (provided the stock price is still increasing). In summation, the opportunity for profit is (hypothetically) infinite, whereas the loss is not. You only lose your initial investment.

  20. I loved this video. Thank you guys so much for sharing your knowledge.

  21. thanks you! I have watched about 10 videos on options and this has to be the best one!

  22. Man, this is so simplified. I've been watching so many option videos and this is quiet the best. Makes me fill more comfortable getting into option trading

  23. thanks for share.
    question: what happend if u hold your option. and reachs your price goal exactly(video eg: aappl 150usd ) on expiration date. you win money?

  24. That was amazing video. I watched other videos on Youtube and spent many hours searching to understand call or put option. This video is simply perfect, simple and practical. big thank you Guys.

  25. Wow thank you so much. This is the simplest explanation of options that I can really understand. You are great at explaining with simplicity.ย Thank you for sharingย and may you make your goal.

  26. WOW, Big shout out to Justin! Just like he said, we have been looking and looking and reading and very little help with buying options that is real. Thank you so much for this video. We are still bystanders and are going poor buying exp. stocks. LOL. TD has a little thingy about charging .75/contract plus regular trade fee if that helps understand cost outside of contract. Do they charge all this again after you close the contract…I bet they do. And all that has to be factored into the created price..so 150 can become really like 152 in our case. Just something to think about. Also there was a warning out there about dividends…something maybe Justin can speak to in another video. How the dividend can mess with stock and contract price? So new to all this and there is so much to learn. Definitely please start a channel this. 2 commas? Darn would just like to see more + in front of numbers, LOL. Thanks again to both of you.

  27. Great Video Justin. My question is related to calculator input. Where did the 2286 number come from? Other than that, I'm tracking. Thanks again for the video.

  28. nice vid……………but, i would like to point out that you have only experianced an "up" market. So when the market goes to a bear market, you may experiance some pain as you learn to re adjust.

  29. Finally, a video where the presenters are not shouting to brag how they made their millions. Very sensible and calm presentation. Thank you gentlemen. It is very educating.

  30. thanks video really captured my attention through out the whole segment and was very informative , is there however a way to loose or owe more money than I ever put in?

  31. Thanks for the info it was very well explained and good luck with your trading hope you hit your stick, slang for million.

  32. so.. it is like whole selling. you buy in bulk and it is cheaper.

  33. His explanation is what Iโ€™ve been looking for!

    Instasubbed

  34. Good clear explanations.
    However why are you BUYING options , instead of SELLING them.
    It's far easier to make money selling insurance rather than buying it then hoping it's value will increase so you can resell it.

    Stop BUYING options. Only SELL them instead.

  35. WOW..just fell onto this video, now subscribed!!! GREAT JOB making Option Trading easier to understand! Just getting into Option Trading and will be looking for more great videos! THANKS

  36. I am not paying you shit Jason Bond… Homo…You can learn this shit for free idiot! Youtube, stop showing this clowns advertising!

  37. This is the best break down of how options trading works on YouTube hands down! Good job guys! Truly..

  38. Just trying to learn to trade and this video makes so much sense out of all the research I've been doing. Subbing to both. Thanks a lot!

  39. Great video very well explained so far best one out . question you made money because apple went up but didn't reach strike price . what if you dont reach strike price .?

  40. so lets say I buy a appl option at 170 right now . and lets say apple moves up to 167 I can sell my contract for more since its so close? so we aren't trading stocks more like contracts?

  41. OMG, this video helped me tremendously, i loved the way Justin explained options. I have been trading stocks for a few years now and looking to expand my investments. I have watched several other videos and this clears everything up so much.

  42. What I learned: how to determine risk & how many contracts to buy.. check capital, pick favorite number = amount of contracts to buy. LoL j/k, that part made me laugh though

  43. Question: Do you actually have to have the total amount in your trading account, or just the amount for the price of the contract?

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