How Buying Call Options Can 10X a Small Portfolio | Call Options Explained with EASY Examples

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𝐋𝐞𝐠𝐚𝐥 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞: I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Before investing, please consult a licensed professional. Any stock purchases I show on video should not be considered “investment recommendations”. I shall not be held liable for any losses you may incur for investing and trading in the stock market in an attempt to mirror what I do. Unless investments are FDIC insured, they may decline in value and/or disappear entirely. Please be careful!

[@mazharh4186]

Henry, I think there is a mistake in this example. How can the break even be 781.50 but to double the money you need the price to go to just $713? The strike price was $750 not $650. To double your money, you would need the price to go to $844.50. That's because you add $63 to the breakeven price of $781.50

[@datboinate0192]

I just thought about that. The strike price is 750 not 650. I was about to asked the same thing!

[@fredwsmith927]

This is the first time I have been able to understand a P&L graph. TYVM! Very clear explanation.

[@InvestwithHenry]

Glad it was helpful!

[@zcollincollin8939]

your option videos are pure gold!!! thank you!!

[@InvestwithHenry]

Thank you!

[@missmoney3464]

They are gold! I love learning options from Henry

[@althomas9826]

Best explanation I've seen yet, many thanks!!

[@InvestwithHenry]

You're very welcome!

[@infact5667]

Great video! You know your stuff. Keep up the good work.

[@InvestwithHenry]

Thank you

[@deniserush7089]

Awesome video!!!! Only video on call option that has great explanations along with simple and superb visuals. You are a great teacher!!

[@avibasailov9138]

You are the best Henry thank you and God bless you.

[@faysal1989]

Thanks for your videos. Please make more videos on option video.

[@Otoño24]

It seems to me that one of the secrets to making money in a call option, or at least increasing the chances, is strongly dependent on how much information one has on the underlying stock to be traded. Choosing a high-volatility stock at random may not work so well.

[@sathy1988]

Hey Henry! great content as always.... I'm very new to options and still learning, but.... @6:04... isn't the stike price $750 from the previous example? And $650 was the current market price.. so shouldn't it be $750+$63 = $813 to double your money?

[@jimsherod8786]

You are correct!!! Henry's example: TSLA is at $650 and there is a $750 strike price with a $31.50 premium The stock needs to rise to $781.50 ($31.50 premium + $750 strike price) to be break even. The stock needs to rise to $813 ($781.50 + premium of $31.50) to be double profit. This breaks down to the following formula with "X = premium amount "and "Y = strike price" .... 2X + Y = double; 3X + Y = triple; 4X + Y = quadruple; etc. (I think I understand this correctly, if not, please correct me.)

[@nsan48]

@@jimsherod8786 not exactly. and henry got it wrong too. Dunno why he didn't bother to explain Delta. The delta on that 750 strike price was 0.34. So every dollar move the stock goes up, the option only increases by 34 cents. So in order to double the investment, it's 31.50/0.34 = $92 + 650 = $742. Stock price needs to go to $742 and the option will theoretically be priced for $63. Note this doesn't take into account other option greeks, such as Gamma (which measures change in delta as the stock moves around), theta (which reduces option value as time goes by), and vega (which increases or decreases option value based on relative volatility change). Basically, it's not gonna be exactly $742 to double the option. It could be drastically different prices, depending on how the stock is behaving at a current moment and how much time has passed since the option order was placed.

[@kamaujla8341]

Ya i think he messed that up. That's my understanding as well

[@beeher5983]

Hi Everyone. I am new to options and I'm a bit confused on this also. If the premium is $63 that would mean the contract is .63 cents (.63 X 100 shares) right? In this explanation $63 premium plus the strike price of $750 would mean you double your money at $813. With this same formula, if I buy a contract at $1.90, it will cost me $190. If the stick price is $62.00, does that mean I have to get to $252 per share to double my money? Does that sound right? What am I missing here?

[@pstephenmarshall]

Henry misquoted his strike price, yes. Should be $750 strike price at 6:02. @Jim Sherod also misquoted it in his reply. Factoring in the delta calculation in @Jim Sherod’s comment, which was correct, the market needs to push the price to $842 in order to double your money in this example.

[@evanste2237]

Yeah I need to go ahead and purchase one of your course that you offer... game time. Let’s get it. 🎓

[@InvestwithHenry]

Lets get educated and stopid rich

[@WeightsAreFriends]

After this video I subscribed and activated the notification bell. Great video!!!

[@anzatzi]

@6:04 strike price is now $650. It was $750. What happened?

[@waltervidal3237]

Hello Henry, thank you x your videos, very informative. I have a question & need clarification if possible. Bought a Put on $42 put on NIO X 4/16/21 $ is now $37.29, so how do I make money on this option? I will really appreciate your answer. Thank you.

[@InvestwithHenry]

sell the option for a profit

[@gurmukhsidhu9187]

Amazingly simplified. Thanks a lot

[@shanhasnain4424]

can someone tell me what does Henry charge for joining his discord? Is there a monthly charge or is based upon how much was invested.

God bless you sir! You explain these things so much better than anybody else on KZbin hands-down. You break it down to very simple terms but not so simple that you don’t get the concept. I’m fairly new to options and I’m starting to understand them. I don’t know if I’m ready for a course but if I bought any horse it would definitely be yours. The breaking down the price to find out where you can 2x 3xor 4X your money Is extremely helpful. I use optioncalculator.com but now I understand how they calculate it. You are the freaking man

[@sahilisrani8145]

Awesome video.. I have a video suggestion.. recently I was exploring options like selling covered calls in the money and selling puts out of the money but there are not enough videos n information on KZbin explaining how it actually works I got to understand the downsides by reading n researching alot but a video will help everyone and since your channel is the best for options trading so why not?

[@jasbirkaur5795]

Looking at your final example, if your stock price goes to $110, you make profits. What do you have to do to get the profit? Do you then sell the call option? Sorry new to options. How do you close your position to get the profit?

[@j.f.almeida9081]

Yup. Just sell it before the expiration date.

[@jasbirkaur5795]

@@j.f.almeida9081 Thank you

[@derektoh7598]

Hi Henry...want to ask how much your cost for beginner ....newbie..

[@InvestwithHenry]

You can just message [e-mail] and he will let you know everything

[@derektoh7598]

@@InvestwithHenry done reply

[@emmanuelbadajos924]

Just subscribed, liked, and hit the bell. I like the way you teach !

[@InvestwithHenry]

Thank you!

[@DenG611]

awesome Henry! can you also cover Selling Puts on ur next video? so that us subscribers can differentiate it from Buying Calls. Thanks!

[@amelmatt5641]

Hi Henry! Love your videos, keep ‘em coming! As I’m learning more about the world of options, I’m finding that selling puts is a much more reliable way to make money, rather than buying calls. Is that right?

[@InvestwithHenry]

Yep, checkout my out selling video!

[@ericaroundtheworld]

Wait a second u had just said I will break even at 781. How come when we do the calculation we don't have to care about the premium?? Shouldn't we add it FROM where we break even ?? I meant when we want to see at what price we could double our money or quad our money .

[@ericaroundtheworld]

How come just simply add the price to the strike price ?

[@InvestwithJase]

Loved this video more like this please also some of your favourite strategies:)

[@InvestwithHenry]

Noted!

[@vsmcastillo7]

Great content,,, but is it true best probability is buy the option on a dip for a call and a high point for a put?? Also is there a coupon code for the daily option subscription?

[@InvestwithHenry]

For the yearly package you can use code "100K" for 50% off

[@jonhassell3714]

do you ever buy the shares if they go up at your lower strike or just close the premium?

[@psychedelicmushroompeople]

Awesome! I will have made mad money, in some future version of myself, after rewatching this video at some later date.

[@ronaldhandy4578]

You still can, don't look down for on yourself

[@ronaldhandy4578]

Did you just picked Interest in learning about trading?

[@yassirhassani9166]

Any news?

[@zukondis]

Nice timing .. was searching for options videos haha So if I bought a call, expires tomorrow way out of the money so i do nothing with it - what happens to that contract/position in my account? Is it just scrapped and goes away? having lost what i paid for the contract of course

[@ronaldhandy4578]

This Guy is an Expert no doubt

[@InvestwithHenry]

It expires

[@InvestwithHenry]

And if below strike you'll lose premium

[@ronaldhandy4578]

@@InvestwithHenry I buy Coins from Coinbase though

[@ronaldhandy4578]

@@InvestwithHenry Are you familiar with NexusTrades?

[@rvsekhar2020]

Henry I like your videos...Thank you for educating us..!!. In this video Triple return will be only when price cross $120 = 120 - (100 + 5(Premium)) = 15

[@ronaldhandy4578]

Hello 👋

[@ronaldhandy4578]

I guess you're also a Beginner in Trading

[@yvettekieu]

In your example the strike price was $750, but when you touched on how to 2x the strike was $650. Is this just a typo?

[@jimsherod8786]

Yes, just a typo in his video... the strike price was $750. $750 + $31.50 premium = break even at $781.50. Then at $813 you have 2x your investment. Every time you continue to have the stock go up by the amount of the premium, you add to 3x, 4x, 5x, etc.

[@datboinate0192]

This some replay value right here. I never seen anyone break this down like this before.

[@andrewwehunt2544]

yeah, i need guidance so i can understand this, lol i half get it, haha thank you for the example

[@gusgus8755]

Great video bro

[@daytonpyro]

so confusing. do you have to sell b4 the contract expires? if so how? do you sell it as a sell or just regular sell

[@adams768]

Is this the same as buying on margin?

[@JJCHASEHEN]

So when it comes time to execute the option that you’ve gotten gains on, do you purchase 100 shares on margin, and then sell the shares, and then pay back the broker? (If you are a small time investor like me) and profit the difference?

[@isabelj411]

Thanks Henry!

[@jimsherod8786]

3:16-3:18 - You mention that how the option behaves before expiration is very math heavy and that you can do a video on it at some later date if interest is expressed. Did you ever do that video? I'm interested in watching it! Thanks for your great explanations.

[@InvestwithHenry]

No I didn't. It's too technical and going to not be worth my time making on KZbin unfortunately. I covered it in my private group though if anyone asks about it

[@jimsherod8786]

@@InvestwithHenry Ok, I understand. Thanks for answering. Great video regardless. Thanks for educating so many of us. I just started selling covered calls this May 2021 and I've made over $4,000 additional money that I would have missed out on without knowing this. I haven't expanded to doing the wheel yet, but I want to also try that! Great series of videos you put out, Henry. Thanks so much.

[@drakedescher8329]

MCD 280 January 2021 Calls if they drop to 1.25 per? Would be willing to bet 4% of my small trading account to bank on possible growth to 300 per share or so later this year, any ideas?

[@williamcox9865]

Hi Henry, I'm enjoying your vids and learning a lot. You really didn't mention timing of the expire and when to sell to take profits. I'm still kind of confused on those points.

[@InvestwithHenry]

Okay will make a video on it soon

[@marcusliufau-wright362]

Where is the $650 strike price coming from in the examples of doubling your money?

[@lilinebedell9451]

I would love to have a one to one lesson on are to trade options

[@InvestwithHenry]

Visit website let's do it

[@andrewwaring1675]

Will you talk about selling the CALL option itself?

[@nsan48]

How could you not explain delta on a call buying strat? The option does not go up $1 for every $1 a stock goes up, if the delta is 0.34 such as in your TSLA example.

[@zcranium72]

At 5:45 you start talking about doubling your money. But in your explanation, your strike price changes from $750 at the beginning or your example to $650 at one point. Did I miss something? Isn’t your real double the money point $813, and not $713?

[@josetacoman9518]

Do you share your traded we can follow?

[@InvestwithHenry]

Yes there is a private discord with daily picks from me in description

[@missmoney3464]

Henrys yearly Discord has been so helpful.

[@juju10683]

Is this considered a LEAP?

[@benjaminyoung5485]

Risk of Assignment? I still havent heard this where as I here it ever ther word with someone whoe good

[@emanuelgilstrop4883]

Thank you for Good advice all of the time! If you could talk a little slower it would be even better

[@kitchensfrance4782]

It seems this is done on purpose to confuse the viewer into buying courses

[@fernandopartida1517]

Henry , if I join your options academy , do you post stocks that we can buy and sell at a time when u think is right ? Or is it just a class that we learn from and we do our own dd on a stock ?

[@InvestwithHenry]

It's a class however their is a community where I do that for additional monthly membership. You can also check it out on the website top of page. Yearly plan is 50% off with code "100K"

[@fernandopartida1517]

@@InvestwithHenry thank u bro your the best

[@bluest1524]

Henry, thank you for this. Super helpful. There's something I need to know, tell me please, if I buy a call option and it reaches the strike price and then above, can I make money without buying those shares? Or do I need to exercise, and buy the shares to realize that profit?

[@frankiefrnk12]

Great video

[@Jenna_Tills]

Do you think it’s realistic to consistently make 1% a week selling options with a 100k account? I

[@InvestwithHenry]

I've been able to for over a year

[@AntonioInvests]

Wazup Henry, I would just save up until I can sell options 😁

[@InvestwithHenry]

For sure!

[@ronaldhandy4578]

Do you Participate in online Investment projects?

[@sammerchant4924]

What happens when you buy call options in a stock with low option volume....

[@InvestwithHenry]

Short answer it's bad

[@guitarpassion1]

Uncle Henry, I can't thank you enough 🙏💐

[@zackmcph]

Good man👍🏻

[@hutdo8650]

If I’m up on a call if I let it expire, will I collect the profits?

[@InvestwithHenry]

You'll buy 100 shares of the stock. Or if not enough money your broker will close. Either way you benefit.

[@hutdo8650]

Thanks Henry, really appreciate it.

[@anzatzi]

Well presented

[@anwarnayani5849]

Henry giving away lots of golden nuggets very good knowledgeable information ℹ️ i appropriate Thanks 🙏 A n w a r

[@ronaldhandy4578]

Yeah he's information will come handy

[@ronaldhandy4578]

Lol 😂

[@ronaldhandy4578]

My name is Handy

[@ronaldhandy4578]

Get it?

[@anwarnayani5849]

@@ronaldhandy4578 ?????

[@freddiebarclay6821]

Crypto currency investment is here to stay if you can’t see that at this point its time you learnt more about it

[@olivermorgan393]

Accurately spoken, this is the best thing I’ve heard in a while. You’ve got my point

[@olivermorgan393]

You have to understand that crypto trading is not magic, the best way to make lucrative trades is to work with an expert

[@jefferyharold3925]

You’re right man. Though I learnt that the hard way

[@arthurnewman6940]

Something similar happened to me but I didn’t lose money. I traded with nothing to show for it until I contacted a pro broker who trades for me and returns profits

[@connorroberts2142]

I’ve been involved in trading in recent times and ever since I haven’t lacked anything, I have cash to spare and I’m living comfortably.

[@adams768]

Surely it cannot be this easy!! It looks like easy money if you just choose stocks with a high growth potential???

[@InvestwithHenry]

Been at it for 8 years. it's easy when you learn from the right person. Check out the course sale.

[@zachcollin3361]

What about IV crush

[@InvestwithHenry]

That's a topic I cover in the weekly option income course

[@roadsterguy1]

Great content Henry, love it. I got your great course mostly on generating income selling options now I can add another way to generate revenue by buying options Thanks!!!

[@InvestwithHenry]

Awesome:)

[@SolidworksUnlimited]

👍👍

[@aaminsaan4693]

Why scam no using your name and replying every answer .?

[@CalmDownJack]

why not a big portfolio? i gotta 10x my big portfolio quick

[@djb-illy8471]

Jimmy Kimmel Brother

[@InvestwithHenry]

Hahah thanks I've gotten that before

[@erinrhodes2804]

Before even watching this Im gonna hope that he warns of the potential risks involved with playing calls smh. Please don’t ruin our new generation of investors who watch this

[@zcollincollin8939]

why not watch the video first

[@erinrhodes2804]

Because I know this KZbinr’s style and I was pretty sure that it wouldn’t be made clear that people can literally get wiped out with Options. The title alone is dangerous. No beginner is going to be able to fully digest the risk-reward spread in a 15-minute video. I’m just worried that weak investors such as yourself may get sucked into the notion that Options are this thing that ppl are just overlooking versus something that most ppl stay away from for a reason. Im here to protect you, weak investor. I care about your Charmin role single ply paper handing self, sir. I care.

[@gaba023]

This guy gives terrible explanation for someone new to call options like me. This is the second video I have seen from Henry, and both are same. Everyone knows, you don't make money until you sell. He keeps on saying all you are investing is the cost of the call. Simply not true. In order to exercise the call, you need to pay for 100 shares at the call price. How can you exercise the call if you don't have all that money in your account? Once I am "in the money" can I sell the call to someone else at a higher price for that person to exercise? How is that price set? Are there really 3 players making this happen?

[@ankacentz8828]

You need talk slowly

[@danielfreeman4765]

The video can literally be played in multiples from 0.25x, 0.5x speed .... upto 2x speed, so choose your assimilation rate✌🏾

[@jeff8476]

Great video