Chris Butler (YouTube Tutorial) finishes with the following words:
Start with Vertical Spreads (buying call spreads, buying put spreads, shorting call spreads and shorting put spreads). They have limited risk you will pay less with a spread than you would simply Buying a Call or PUT. With shorting options we spoke about how much you can lose when shorting Calls without any protection or shorting Puts without any protection but you can limit the risks of those strategies by shorting a Call spread which is shorting a Call and then buying another Call at a higher strike price to limit your risk or you could Short a Put spread which would be shorting a Put and then buying another Put at a lower strike price you also may have heard of a strategy called an Iron Condor which is essentially the combination of the two where you make money if the stock price remains in a certain range. That said I would really advise against shorting naked options and these are going to be strategies such as just shorting the call, shorting Puts all by themselves mostly shorting Puts on leverage you can short cash secured Puts meaning you can actually buy 100 shares at the strike price if you are assigned or you want to buy the shares but there are also going to be more advanced strategies which are incredibly risky which are the short straddle which is when you short a Call and short a Put at the same strike price and in the same expiration and then there's the strategy called a Short Strangle which is shorting a Call and shorting a Put and you make money when the stock price stays in the middle but I would avoid those strategies as they have immense loss potential, with these strategies it is possible to lose more money than you have in your account.
Stick to vertical spreads. From there learn about the Option Greeks which are measurements of expected Option price changes given a change in the stock price given the passage of time and given a change in implied volatility. So the Option Greeks will inform you of how your option strategy or your option position is exposed to these various effects or various factors discussed in the video.
Clearly Vertical Spreads are nearing the top of my study list and clearly studying Straddles, Condors and the like are very low on my list and from what he says perhaps shouldn’t be on the list as I am never going to be doing them?
Start with Vertical Spreads (buying call spreads, buying put spreads, shorting call spreads and shorting put spreads). They have limited risk you will pay less with a spread than you would simply Buying a Call or PUT. With shorting options we spoke about how much you can lose when shorting Calls without any protection or shorting Puts without any protection but you can limit the risks of those strategies by shorting a Call spread which is shorting a Call and then buying another Call at a higher strike price to limit your risk or you could Short a Put spread which would be shorting a Put and then buying another Put at a lower strike price you also may have heard of a strategy called an Iron Condor which is essentially the combination of the two where you make money if the stock price remains in a certain range. That said I would really advise against shorting naked options and these are going to be strategies such as just shorting the call, shorting Puts all by themselves mostly shorting Puts on leverage you can short cash secured Puts meaning you can actually buy 100 shares at the strike price if you are assigned or you want to buy the shares but there are also going to be more advanced strategies which are incredibly risky which are the short straddle which is when you short a Call and short a Put at the same strike price and in the same expiration and then there's the strategy called a Short Strangle which is shorting a Call and shorting a Put and you make money when the stock price stays in the middle but I would avoid those strategies as they have immense loss potential, with these strategies it is possible to lose more money than you have in your account.
Stick to vertical spreads. From there learn about the Option Greeks which are measurements of expected Option price changes given a change in the stock price given the passage of time and given a change in implied volatility. So the Option Greeks will inform you of how your option strategy or your option position is exposed to these various effects or various factors discussed in the video.
Clearly Vertical Spreads are nearing the top of my study list and clearly studying Straddles, Condors and the like are very low on my list and from what he says perhaps shouldn’t be on the list as I am never going to be doing them?
