This is for the people that find options complicated
When you are trying to learn a new skills, it might seen difficult and complicated. Writing, speaking, walking, driving, swimming at some point these were skill that were complicated too. Once learned, they became simple, they became comfortable to the point that you do the skill without hardly any effort, without thinking about it.
With options trading it’s the same thing. Just like with any other skill that you had learned, once learn it, it will not longer be complicated.
Two type of Options
There are two type options, call options and put options
Call options
- You buy a contract that give you the right to buy 100 shares at a pre determined price on or before expiration date
- You buy a portion of the business.
- You own the shares of stocks
- you buy call option when the market is going up
- You pay a price to buy a premium
- example, you can buy a call option contract at $100 to locked the price, sell it when in profit before expiration date
- You used less capital and you get higher ROI
- You limit risk and get unlimited returns
- Buy stock a discount
When you buy bellow current price, it’s called In the money ITM
When you buy above the current price, it’s call out the money OTM
When you buy near the market price , it’s called at the money
Put options
- Put options, it’s almost the same as call options, but in the opposite directions.
- You do put options when the stock is going down.
- You have the right to Sell 100 shares at a pre determined price on or before an expiration date
Cash secured puts, if you really want to make money learn to do cash secured puts.
