Options Trading









  1. Risk Tolerance vs Risk Capacity
  2. What is the strike price?
  3. What is your expiration date?
  4. Call vs Put

14 comments:

  1. When the so-called ‘rich guys’ speak negatively about the market, you must always remember that some are betting big against it, and make a lot of money if it goes down,” Trump tweeted. “Then they go positive, get big publicity, and make it going up. They get you both ways. Barely legal?”

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  2. According to Investopedia:
    Personal risk tolerance is the amount of risk that an investor is comfortable taking or the degree of uncertainty that an investor is able to handle.
    Risk capacity, unlike tolerance, is the amount of risk that the investor "must" take in order to reach their financial goals.

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  3. According to Investopedia:
    A strike price is the set price at which a derivative contract can be bought or sold when it is exercised. For call options, the strike price is where the security can be bought by the option holder; for put options, the strike price is the price at which the security can be sold.

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  4. According to Investopedia:
    Buying a call option gives you a potential long position in the underlying stock. Short-selling a stock gives you a short position. ... Buying a put option gives you a potential short position in the underlying stock. Selling a naked, or unmarried, put gives you a potential long position in the underlying stock.

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  5. Understanding Multi-Leg Options Orders
    A multi-leg options order is used to enter complex strategies instead of using individual orders for each option involved. This type of order is primarily used in multi-legged strategies such as a straddle, strangle, ratio spread, and butterfly. The commission and margin requirements may be less with some brokers when a multi-leg trade is executed as a unit rather than several individual orders.

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  6. 1. Don't buy options with money that you are not willing to lose.
    2. Commit to a strike price with valuable research.
    3. Set a personal percentage for gains and cash out.
    4. Be okay with a Loss. You can't always win.
    5. Actively monitor each option or set a stop loss.

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  7. Options Calculator
    https://www.optionsprofitcalculator.com/

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  8. Options Greeks
    https://m.youtube.com/watch?feature=youtu.be&v=GxmIvvROge4

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  9. You are buying a contract = 100 shares you want that contract to go up (call) to a magic number (strike price) before the contract expires.

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  10. Or you want that contract to go down (put) to a magic number (strike price) before the contract expires.

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  14. Never hold an option to expiration.
    Have discipline, take profits, and leave.

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