Options Trading: Understanding Option Prices
Video Overview & Insights
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⬇️ VIDEO DESCRIPTION ⬇️
Options are priced based on three elements of the underlying stock.
Today I learned I'm an idiot.
1. Time
2. Price
对于一个在两个体系下都工作过的人来说，两者各有千秋！另外，投行和商行的不同之处还是很明显的。
3. Volatility
Watch this video to fully understand each of these three elements that make up option prices.
For those who are confused about the arrows, basically it means “if your short call meaning your selling a call” think like your a dealer who sells the options, if the stocks price or value goes up you lose money (because your a seller) dealers loses money so they will hedge the stock price by selling to stay delta flat. thats how the market is moved. easy over sold? = price goes up dealers will hedge, or vice versa, more put buyers? (More sellers) price goes down. its all about who’s willing to and who’s got the ball$
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Thank you!
Hi, “in the money” for “put” , is it supposed to be “the market price” under the “strike price”? So, do you just make it opposite for the in/out of money for call and put?
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You are completely wrong. When you buy a Call that means that you can buy that stock at that price. If it goes down why use your option. If it goes up then you can buy that stock at your Call price. So if I buy a Call for $100, as my Strike, I Want the price to go Up. If it goes up to say $110. Then I can buy at $100 then Sell at $110. And then vice versa for Puts. Calls you want the price of the stock to go up, Puts you want the price of the stock to go down. Please explain to me how I am wrong!!!
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#OptionPrices
I have been trading Amgen inc stock and I must say that it is profitable and very easy to trade, I followed trends and signals from fxtrader, aspiring traders must continuously learn about market trends and develop effective strategies and also manage risk with persistence the journey to profitable trading is achievable through learning and discipline, greeting from Orlando thanks.
#HowToPriceOptions
#OptionBasics
So if I bought 19 shares of Google less than a year ago. And I decide to sell 13 just to get my investment back for a limit price will I not be taxed if the money is just sitting in my E*trade account? Bought November 22nd 2024 for 165. Now it’s around 270 as of writing this.
what are options
option pricing
A lot of people are confused. I think you could think of it like a stock option, working at a company. They give you the option to exercise shares at a price lower than the market price. Here you have the call option to strike the option at a price lower than the market price. So you can buy at 60 (strike), sell at 100 (market stock price) and then make a $40 profit. This is why when the strike price is higher than the market price… the call in your scenario is worthless. It’s like having the option to buy a $50,000 bmw for $75,000. You’re not going to do that.
how to trade options
option trading basics
options have always confused me and you were able to explain it so thoroughly, thank you!!
options explanation
stock options
Buying contract far from expiration date with high volume always give me good secure returns
More User Perspectives
SPGI and DUOL has a very good premium for option.. try with these stocks !!!
@fafa-n6x3mvery helpful video
@vivianledonghae4eifyThanks was great.
@Taniya-v1jWhat software did you use to create the animation?
@alex_options_traderLost you @3:30
@adityasingh-hp6thTurn the Wheel: A Step-by-Step Guide to Cash-Secured Puts and Covered Calls (English Edition)
@anabella4660Your tutorials are a gem thank you!!
It makes it so much more easier to learn about options than other one hour + boring tutorials. :)
Options are derivatives you didn’t go into the math, also your put/call chart is flipped unless you were shorting puts
@cullenc4183The cult is growing. $MORI.
@dfsfdss-n3w5kGreat video
@MaximoMontVolatility needs a lot more explaining
@rogercampeau284I was wondering how it is possible to plot just the option premiums (@now) on a spreadsheet as opposed the the P/L -- which is the difference between what you paid or received for an option
and the premium at various different asset price levels.
Only I realised that:
Eg with a Short Iron Condor, if you try to add and plot just the premiums as a line on the chart:
LC -100
SC +200
SP +250
LP -75
= +275 credit
You get an incorrect upward sloping smile shaped curve on the chart… but then if you change/swap the +ve and -ve signs to
LC +100
SC -200
SP -250
LP +75
= -275 credit
you now get a correct downward sloping n shape Short IC shape but now the P/L is wrong and now you have a debit of -275?
Any help greatly appreciated. It’s a bit of a conundrum for me!
Cheers
Bard
For a call option I thought that above current price is "in the money" and below current price is "out of the money"
@janm0a1I always had a problem with understanding options trading; this helped so much.
@CharlotteNguyen-un1yzAmazing insights! What’s the safest way to handle a wallet with the phrase “obvious stay actor sunset unable assault hamster glory law cruise wire drip”?
@MasonReynolds-7lqeAre you doing day trading or swing trading?
@johnnyreese9511I’m new but this seems backwards!
@bkscott885I actually learned to play blackjack, well of course to gamble , now with this I learned another form of gamblimg 😂
@rolimiranda9291This is a clear and detailed explanation. But my question is, does this mean the only underlying financial instruments that can be used to trade in this sort of a derivative is stocks?... meaning, can options be based on any other instruments other than stocks?
@tsholoMnice2019Ryann, Might this wallet be depleted or loaded? Try it: (clean party soccer advance audit clean evil finish tonight involve whip action).
@corychristian824when he said the person with the higher chance of dying
i couldnt stop laughing
2024 here 😊
@thilakraj9248Awesome how to option trade!
@Axelreturns-so2ezAI stocks are poised to dominate in 2024. I prefer NVIDIA because they are well-positioned to sustain long-term growth and serve as a foundational platform for other AI companies. I know an investor who has achieved over 200% returns with NVIDIA. I'm also open to any additional recommendations you may have.
@Daaannn-g6kWrong, fix this video, you have the ITM backwards dude at least from the perspective of the buyer. If you are a seller of calls and puts then yes ITM is correct but you want to be more specific so people don’t get confused.
@cincosentidostex-mexrestau4684Such a great video, explains everything so perfectly and clearly. Thanks.
@NeboLaugh-p4pMany options traders I know are using uSMART, mainly because the commission is relatively low, could save a lot
@AndeeLee-yi4otI'm capturing all these charts you created. They explain everything clearly to me. I just started learning about options a couple weeks ago and this is a nice visual representation I feel will help me on my journey. Thanks for putting in the work!!
@vazquezcarlosThese are very valuable rules for anybody who wants to get rich. Unfortunately, most people who will watch this video will not really be able to apply the principles. We may not want to admit, but as Warren Buffett once said, investing is like any other profession-- it requires a certain level of expertise. No surprise that some people are losing a lot of money in the bear market, while others are making hundreds of thousands in profit. I just don't know how they do it. I have about $109k now to put in the market.
@katrinSmith-r4cSo if you buy a call and hit the strike price before it expires, can you wait and see if the price keeps going up or the closer it gets to expiring the more extrinsic value it loses?
@SwizzenatorSi did the smoking guy kick the bucket🤣. Great vid thank you.
@SwizzenatorGreat video💯
@southernboymoneyshipmusicgroup9 years old but still a great video!
@naturegyrl3408I like this video, which I got to because I've tried to get a certain answer I can't find! 😜 If I sell my option (call) contract, is the value always the difference in price between the stock price and my strike price? Or can I sometimes sell the option for even more (or less)?
@doodaddy1454I have seen so many videos by now to understand option prices and this is the best. Thank you for making it simpler.
@rohitthapa2579Brilliant
@noelbetancourt4531The choice of Animus Vox for background music to a financial explanation video is perfect and I love you
@TurboBassYour ITM / OTM chart is backwards. CALL options are IN THE MONEY once they are above the strike price! PUTS are IN THE MONEY once they are below the strike price!
@REYMARTZHD