11 Options Trading Tips (Beginner-Advanced)

[@projectfinance]

✅ New to options trading? Master the essential options trading concepts with the FREE Options Trading for Beginners PDF and email course: geni.us/options-trading-pdf

[@luis3367]

"having rules takes the emotion out of the game" this sentence right here is a gem. great content

[@animalmagnetizm1]

Chris is an amazing teacher and I'm impressed with how well and in-depth his knowledge of options is. He talks faster than my comprehension level but luckily I can stop and replay the parts I need to catch up on. Thank you, Chris, you have helped elevate my understanding of options.

[@dylanskye1534]

There’s an setting to play the video at varying speeds this might help

[@royallgood8574]

Make sure you turn on the subtitles.

[@LMF-ct4lt]

Chris, I have watched most of your videos, some of them several times. This is one of my favorites because it is so specific and understandable. I will us it as a rule guide for my trading. I am going to let it sink in, then watch it again tomorrow and take notes.

[@projectfinance]

Thanks for letting me know! Maybe I’ll make a redo of this one with added tips!

[@68RedDragonz]

Catching up on old videos, getting into options to help investments grow and I’ve found a gold mine of knowledge. Thank you, I have a pretty solid trade management plan thats working well paper trading while waiting for money to move 😊

[@bobstovall5449]

Chris, You are very good at presenting this material in a clear and understandable format and style. This may be the best video presentation I've seen, thus far, on getting focused on what you are doing and how to reduce or eliminate the distractions that interfere with the successful management of trades entered.You may have already done one but I'd like to see more on exactly how to "automate" exits based on the various triggers described here. Perhaps you cover that in your course and are disinclined to 'give it away for free' but it never hurts to ask, Right?

[@michmash5341]

Right there with Bob! I'd love to see a link to be able to download the slides on this one. But - not having it forced me to go back and watch again and take copious notes! Very, very helpful. I started trying to learn Options maybe 2 years ago. Started placing my first Option trades a few months ago. Totally no clue what I was doing, although I thought I knew. When I saw that trades were going against me, I had no idea what to do next. Learning by losing TOO much $ is not a great strategy! Your approach really does make it all more systematic and I appreciate that. Appreciate the link to the log. This will improve my trading tremendously!

[@Eastbaypisces]

yea so how do we exit trades automatically? how do we set that up??

[@avtarahluwalia3170]

You have a very good , simple and very easy to understand videos . thank you Chris.

[@UnbiasedMagicReviews]

One of the single best videos for good general advice for option trading. Bravo!

[@debbonnerjee7865]

I have watched a few videos on option trading by Chris. Chris is an outstanding teacher. Very well organized. It would be great if I could get the slides that you use to explain the topic. I will be watching these videos a couple of times before I start trading options. Chris, you are the best. Thanks. 👍

[@xl5388]

There’s a link to the slides in the description for the 3 hour options how-to vid he did.

[@sweeliancha5624]

I like your teaching. Easy to follow, clear and not confusing.

[@raneumesh1]

Very detailed information on Options, great work! I watched many videos on options but many of them shows only one side of the coin. You have covered almost everything, no questions left in my mind :). Best video for beginner to understand Options. Thanks you so much. Best luck.

[@jcmassoc]

Hi Chris...Great stuff. Could not find the link to the trading journal.

[@MarianBoricean]

Hey, thank you for the nice explanation and the file shared. On that log file you have two columns for VIX. What is that? Is the VIX index for the general market, or this means "Volatility index" for the specific security?

[@bond211098]

Buddy, you make it look so easy!! Great Job... Applying everything thing becomes overwhelming especially if you don't work with the same market!!

[@RajcanSurface]

This is very helpful. I am new to option trading and been watching your vids to get up to speed. Are you open to personal consultation? Thx

[@wilmamalloy6062]

Very easy to understand, very knowlegable , I will continue to follow your course, thank you for the tips.

[@zhihongh]

Great rules to follow. Thank you. I found tastywork only has limited choice of stop loss triggers. For example it doesn't have trailing stop. How do you work around it?

[@michmash5341]

Do you have a video that covers trying to close at better than midprice? When first learning, it is sometimes confusing which way to adjust and where to initially set your fill, whether above or below the mid.

[@davesmith949]

what is the difference between open interest and volume

[@RephaelInbar]

Very good video and tips. What are your thoughts on just selling straddles of large cap (high liquidity) stocks at 0.03-0.05 deltas and 21-30 days to expiration? (very low risk, implies 95%-97% of being ITM at expiration and short time frame is another reduction in risk)

[@Hendrixphishinfloyd]

11:12 - This was me until about 15 minutes ago. Thanks for this video. Incredibly educational!!

[@steveedelen3251]

Great video Man. I’d love to see live examples of how the Greeks change in real time. Nothing helps me more than live demonstrations. Even if you had to speed up (time lapse the video probable for theta) but I’m talking mainly Delat, Gamma, and Vega. That would be very helpful

[@chantalderonvil3141]

Love every single one of your tips. Thanks

[@koranpass3427]

Chris thank you sweetheart for the information, pick up a lot of tools for options trading ✅✅✅😍

[@MaxxerG]

Really well explained. Do you mainly sell options or buy options?

[@6zeyt428]

Thanks. I’ve been following you and I am starting to see the light at the end of the tunnel. Please continue guiding us in the option trading world

[@robertosborn2942]

looking for a high volume strike price will help i think. the bid ask spread seems to much tighter. does that make sense?

[@nickbiancalana5731]

Great video. My biggest observation was honestly that you did not blink once in the whole video. Kind of scary but impressive at the same time.

[@jaysmith4302]

Very good series but I disagree with one thing. I would rather have 15 small positions than 3 large ones, as long as they're not so correlated that they're all basically the same trade. I want the law of large numbers on my side. I find I can manage up to about 20 positions without too much difficulty with a combination of GTC orders, alerts and drawing price levels on the charts. Your tip on logging your trades is absolutely spot on.

[@projectfinance]

Thanks Jay! I appreciate the comment input. Everyone has a different take on the number of positions topic. My take on it is that at some point, all of my positions WILL become correlated when the market makes a big move, typically to the downside. Stock correlations increase significantly during heightened periods of volatility and tend to decrease during periods of low volatility. For me, having 15 smaller positions is the same as having a few larger positions, at least that's how I see it. The good thing is that we're all entitled to our own ways! Thanks for watching. -Chris

[@Eastbaypisces]

@@projectfinance what do u mean correlated tho??

[@kelleycaptain73]

Thanks so much Chris. Still trying to comprehend everything you are teaching. Please keep the content coming.

[@smitapatel8519]

I love your videos detail specific, What happens if stock goes beyond strike point and before expiration date

[@echospyda1]

Love the videos man. Many thanks for the assistance. Downloaded the spreadsheet. I'm not clear on how VIX, and Actual size come into play. Can anyone assist? Thanks,

[@egoboy]

Hi if I understsand you correctly, is picking strike price by delta the same as using Probability Itm %?

[@projectfinance]

Basically the same thing, yes! But I still use delta even if the Prob. ITM is available to me.

[@egoboy]

@@projectfinanceThanks! what might be a good way to forecast the delta of an option so it is cost-effective? I find that even low cost, far otm option can somehow gap up or down in a hurry.

[@bhng636]

Hi Chris - awesome sharing. Just finished your 3 hours video on Option trading for beginners. Just want you to know I subscribed but not able to find your Trade Log template.

[@richardgallois3262]

Chris, I absolutely love your videos and the way you teach. cootos my brother

[@mariasv6308]

Chris, thank you. I watched the longer Options Trading for Beginners, and now this one. I have a question about Implied Volatility and how you would factor that into a trade.

[@michmash5341]

Chris, did you see this request?

[@eversunnyguy]

Great info..Thanks.

[@NickHoweIsAwesome]

great vid...but i didnt see this man blink a single time

[@projectfinance]

Yeah I will work on that. Didn't realize that was happening until I saw the vids myself. :D

[@yaowang4858]

9:00 you didn't watch the video carefully bro

[@AS-bm6vs]

Blinking is an option for him not a must !!

[@SAZ-3500D]

I’m trying to buy some call options on your blinking lol

[@7xr1e20ln8]

@@AS-bm6vs he has an option to blink. But not an obligation to blink.

[@undersaint9700]

Thank you so much for this video! These are extremely helpful!

[@projectfinance]

You're welcome and thank you for the comment!

[@indianconsumers]

@@projectfinance I like your talk with smiles and information. Keep it up. Best wishes

[@420BLUNTLEY]

Only if implemented

[@warrengedye2888]

Very good!! Great video!!

[@BeginningProgrammer]

I appreciate you posting your actual amounts. It's easier to project reality when you see someone's real numbers. Great options tips. Thanks.

[@scotts1055]

Great video. Clear, concise, thorough. Thanks

[@maxcapital8570]

My question to you is whenever you're trading options on a particular underline is there a thesis a catalyst a narrative that you go by as a headliner to why I should trade this option?

[@parishparsa]

Hi how extensive of (TA) is required for option trading ?

[@srs3505]

Clearly presented. Great tips for beginners and intermediates, without wasting any time. Thanks

[@projectfinance]

Thank you, Sudhir! I appreciate the comment!

[@cristianius5525]

Excellent video 👍 Quick question for you. How do you deal with paying dividends?

[@arupian666]

He pays dividends ?

[@jaimeguzman8241]

Any video on how to put a limit price on a call? Thank you for your videos

[@TrollFalcon]

This worked well on having profit/loss triggers. The profit trigger is 25-50% and loss is 50% with less than 2 weeks left. I use debit call spreads to not need collateral, and I play whack-a-mole between spy and gold/silver because they seem to flip flop.

[@orepus1]

Question. Why close a loss option? Can’t you just let it expire otm and only lose the premium? I thought the premium was the only possible loss?

[@Elizabeth-ns5gd]

I wasn't sure how to contact you so I decided to comment here. I've been watching several of your videos. You really do a great job at explaining options. At this point I am really enjoying my paper money journey into options. However, I am messing up somewhere and I simply cannot figure it out. I seem to be making the right predictions of what a stock will do ( go up in price or go down) but I still lose money whichever side (call or put) I purchase from. I believe I am picking the wrong option contract/strike price. I must be missing something. How do we ensure we pick the right strike price/option contract for what we believe the stock will do?

[@amitg9519]

Dear Chris please make video for option buyer, I prefer to buy option., I trade in Indian Market. Also please help to understand whether premium decay analysis automation can be done in excel to find direction of market. Example if premium decay is higher on call side, it means price will go down and vice versa.

[@AlphagirlMae]

Really helpful to know exit strategies to lower risk.

[@yongqin3781]

nice video and lots help for me as A new option trader. just wondering what strategies you normally used and what stocks you are trading with.

[@roujiamo8570]

Another great video Chris

[@youtubeforresearch]

woww you are the best. I never thought of my exits.

[@drgarycarr]

Great Vid Chris - Thank you. Only Trading a few positions fly's in the face of your old employer doesn't it? I thought Tom (& Company) have research that validates the whole "Trade small / Trade often" concept. In addition, you believe in closing losing trades out when they hit a certain loss %, have you shown this to be more effective than letting the probabilities play out - especially with regards to defined risk? Thanks in Advance

[@projectfinance]

Thanks Gary! Yes, it sure does go against the TT philosophy. I was always one to challenge certain aspects of the TT philosophy when I worked there. :) I haven't seen a study from them that looks at systematic options strategies spread across 10+ stocks vs. just trading a larger position in an equity index. And that's understandable. I can't think of a way to test that and definitively say one is better than the other. How would you pick the stocks? How about the strategies? There are too many variables. I'll make videos in the future that talk about the performance of my trades using the hyper-focused approach I currently believe in. Until then, I'll just have to look a little out of my mind to those who follow the TT way of trading. I certainly believe undefined risk trades should be closed when they move against you a certain degree. With defined risk trades, it doesn't make sense to close losing trades if you're already sitting with a loss near the maximum loss potential. The risk/reward in that scenario supports holding the position in hopes that it comes back, as all the damage is done and you still have everything to make back. With undefined risk trades, I'll never believe that letting the trade play out is better than controlling the situation, closing the trade, and re-establishing the same exact strategy with a new expiration and strikes. I do have some videos that look at analysis of profit-taking/loss-taking strategies on undefined risk trades. Here's one that I dug up: kzbin.info/www/bejne/en2bmXutZtCBbZY It may not be what you're looking for, but I will definitely do a video soon about closing undefined risk trades vs. letting them run when things go bad. I hope this helps! -Chris

[@drgarycarr]

@@projectfinance It Does Chris - Thank You

[@parishparsa]

Do you do personal private training?

[@wicks5813]

Please make video for option day trading . which strategy worked well either sell or buy.

[@DeltaCherry]

Great tips. The overall message of quantifiable trading makes sense and I will move more towards that. I really like the multiple exit strategies. Thanks!

[@Eastbaypisces]

how u set up exit strategies anyway??

[@michaelmacrae2349]

Also good idea to use simulated account to test strategies and become familiar with platform mechanics as well as not trading live money until you become a consistently profitable simulated trader.

[@arupian666]

The only issue I have with this, is that the psychology involved between paper and real trading is so vastly different. Paper trading has zero consequences if you're wrong. Trading with actual money is a different animal. Paper trade to understand the mechanics, but after that, trade for real as soon as you can. You' be surprised how many people I've known have "successfully" paper traded for too long, then when it's real dollars and cents are like deer-in-the-headlights.

[@timothyscott1641]

Thanks Chris for another video with lots of good material.

[@horizonglobalmarket4939]

Thanks a lot Chris again for your time and all the excellent info! I was not able to find the link that you referred to for downloading the trading log!!, regards Loran

[@michmash5341]

It's in the descriptions below the video

[@alexanderfrost2943]

those were really awesome tips. thank you.

[@RockDaKessba]

Man I wish I would of listened to this video before I started trading with options. Never too late I guess hopefully I make up what I lost from here. Ty for the spreadsheet

[@shootermacgavin1]

Excellent, thanks very much for the tips

[@jonathanwilson3080]

This is my first serious video about Options have got some perspective hope to get more in the next video

[@uhohotdog3483]

Chris you are very relatable and a Genius 🤗

[@GenuineEncountersCo]

how do you adjust price after entering an option?

[@itsallgood707]

You're a real option trader rebot, you didn't blink once in this video 😉 appreciated the info

[@anmolhira1876]

You are a hero😎

[@tcstrackteam]

What a great resource. Thank you.

[@joannahuc1318]

Amen! Excellent tips. Love your channel

[@projectfinance]

Thank you, Joanna! -Chris

[@thti3070]

I’ve learned so much since I started watching your videos 😊 thank you. Is that a cat in the back ground ? 😂

[@HefTrade]

Whats up Chris! Tip number 4 was really helpful. I will have to try to get my positions filled a couple pennies higher. As far as the exit strategies, the delta based exit is new to me. When would you say it is more advantageous to use a delta based exit versus a stop loss based exit, or would you say they both bear the same weight and it is a matter of preference/risk tolerance? As always, Thanks for the great lessons and I look forward to your next video. Evan

[@projectfinance]

Hi Evan! Thanks for watching again! The delta exit is just another way to use something that is quantifiable that can be used to determine trade exits. It is also more dynamic than a straight up stop-loss. As a quick example, if I sell a 100 straddle with 30 days to expiration and my stop is to close the straddle if either option gets to 0.60 delta, then maybe I'd need a $5 move in either direction to get stopped out (just a hypothetical). But if the stock is still around 100 and 15 days pass, I will have a profit on my position. But with less time to expiration, the deltas will be more sensitive to stock price changes, and maybe a $2.50 movement would cause the 0.60 delta stop to get hit. Because of this, the delta stop actually serves to protect my profits and be more aggressive with closing the position if the stock price moves away from my optimal zone closer to expiration. Does this make sense?

[@HefTrade]

@@projectfinance definitely makes sense dude! I spent some time yesterday choosing a SPY spread based on a 30 delta. Of course it will take some practice to implement the strategy but I now have some new info to broaden my approaches.

[@JennaWeaver-j2f]

This guy knows a lot of great things! If you want to know more about trading, check all of his videos🙂

[@projectfinance]

Thank you! I just spent a ton of time creating an Options Trading for Beginners PDF (170+ pages now) that includes my best explanations/visuals explaining key options trading concepts and strategies. Check it out: www.dropbox.com/scl/fi/g7d402wnapqexq344ct73/options-trading-for-beginners-aug15-v1.pdf?rlkey=dort61xyaz1rubndbwbqmhd5i&dl=0 If you want updates to the PDF over the coming months/additional learning resources, consider dropping your email on the page here: geni.us/options-trading-pdf

[@Twistedspine7]

Great Video, thanks!

[@ezramenaged3018]

Hey. I have been watching your videos a lot recently and they are really great, so firstly thanks for that! I wanted to ask a question regarding the execution of options. When selling a put or a call for that matter I know that you described in some of your videos that it is really rare that an option is executed by the counterparty pre the date of execution due to the extrinsic value. That being said I have been told recently by others that there are quite a few times in which the counterparty will execute the option. In certain cases that can leave you at a heavy immediate expense, and I am wondering how do small accounts cover such executions. So for example, if I had a $10,000 account and sold a vertical spread (stock A is at $100, sold put for 90 and bought put for $85, and did 2 contracts). The stock goes down to $86. In this case, even with time left on the contract, the party I sold the put to can execute, causing me to have to buy up $86x2 contracts x100= $17,200 of stock A. Which I don't have in the account. Although the loss is only $4x2x100 = $800. I am wondering how this would be handled if the put I sold is actually executed forcing me to buy the stock. Would I need to purchase the $17,200 of the stock or would my account immediately sell the stock at a loss and close the position? Would very much appreciate your reply.

[@vineettaneja1074]

Good simple tips specially for beginners.

[@mikeschmitt6622]

where is the link for the tracking log?

[@joea8650]

Great content as always.

[@projectfinance]

Thank you!

[@TrollFalcon]

Have you tried a 3 leg option to fight theta decay. For instance: VSLR 21% growth last month $8.89 current price February 21st expiration $9 put sell for $0.63 $7 put buy for $0.10 $9 call buy for $0.45 $8 net credit at entry, maximum risk of $192 at $7, break even anywhere above $8.92, infinite maximum gain, no theta decay.

[@alwells99]

A great teacher and great information...but one request...please slow down your speaking rate...I have to keep going back to determine what you said...

[@projectfinance]

Thanks for the feedback and I do plan on slowing things down in the future.

[@rainydayswithdogs]

Another very clear video. Is your trading account size so low due to financial constraint? In previous videos you stated that you have been trading for several years, which makes one wonder why it has not compounded to a higher amount.

[@hannastorm4986]

Wow! I am so elated that I came across your videos. I am so new to this, but I am determined to be a well developed and disciplined trader. I have learned so much from watching your videos. Please continue to make videos for beginners like yours truly. I sure wish you had the time to develop an extensive course at a reasonable price. It would definitely be a win/ win - An AWESOME teacher collaborating with inquisitive students, eager to learn! Thanks again!!

[@hannastorm4986]

@@PiññedbyProjectfinance-e4u Will do! Thank you for responding!!

[@projectfinance]

Don't text any numbers commented here! They are bots! I will never provide a WhatsApp number here.

[@mistletoe91]

Once again , great video

[@wilmanmiami]

Great thanks, very useful

[@projectfinance]

Thanks!

[@hirenthaker1733]

good video and tips and explanation

[@osmanigonzalez5973]

new here > good everything for everybody .if the contract is about to expire who will buy if i"m selling?

[@projectfinance]

You will be able to close the position if you're trading liquid options (lots of volume, such as AAPL options). A market maker could be the counterparty. You may have to give up a little bit of value to close, but it won't be a lot if you're trading liquid markets.

[@ALIHASSAN-cy5hy]

Hi Chris, please help with an answer. Every time I enter a “Sell cash secured Put”, the *Mark price* seems to be “ALWAYS” higher than My *Trade price* from the moment I sell the cash secured put. So my P/L open and P/L% are always in the Red Loss from the day I Sell Put. And it takes a long time to turn Green profit if ever. So how can I avoid that situation from the beginning ? I can’t set an exit strategy because I just enter the trade and lost. I can’t set a profit strategy because I just enter the trade and lost. So what strategy shall I set ? Seems like options trading are design to create individual losses. Sighhhh.

[@mikeJones-zo8si]

Bid 5, ask 10, you sold for 5, then the mark is 7.5. Try to sell a little higher . Mark can also be a little off.

[@mrb1usky764]

brother this is a lot of information. I am going to take baby steps.

[@projectfinance]

Yes it is. It's not meant to be a step-by-step tutorial, rather a video about lots of different topics. Take your time!

[@mrb1usky764]

@@projectfinance thank you very much. I have another question. So after the call is in the money do I want till it exceeds the break even price or sell at break even price? Also I notice that as I get close to the break even price the break even price goes up as if I am chasing the break even price

[@therealmaverickx]

These are some great tricks, and I can tell that you have good experience. Problem for me is: you said from beginner to expert and it sounds like you're speaking Spanish. Is there anything you can lead me towards that explains the terminology for beginners?

[@scottblair5401]

I'm a total noob to options trading so thanks for these tips.

[@projectfinance]

You're welcome, Scott! They vary from beginner-advanced tips, but I hope all of these tips will help you out at different points in your journey.

[@sureshjogia876]

Only trade with one or two trades? What happens to the concept of diversification? Also, if you have 100K account, for example, how much of this would you risk in that one or two trades?

[@projectfinance]

As mentioned in the video, I personally don't believe in diversification with option positions because it's not the same as diversification with stocks. When buying stocks, you make money when the shares increase and lose money when the shares fall. If you only own one stock, you are exposed to overall market risk AND firm-specific risk (the risk of the company performing poorly and therefore your one investment doing poorly). The more stocks you buy, you diversify away the firm-specific risk and are left with overall market risk. Diversification is definitely a beneficial thing when talking about protecting your investments over a long period of time. However, option positions are far more dynamic than a simple stock purchase. If you have 10+ option positions (some bullish, some bearish, some neutral), you aren't necessarily going to do better than if you had one or a few positions that focused on a particular outlook (bullish, bearish, or neutral). I'd argue that for retail traders, the more option positions traded simultaneously, the worse/more random the trader's performance will be over long periods of time. I trade two products: S&P 500 Index and VXX. I trade very specific outlooks on these products and have strict trading plans for strategies in both products. On a $100K account, this year my average allocation has been about $35K per trade. That's a lot, but the management rules protect against actually realizing a $35K loss. Since October of 2018, the worst loss I've experienced was 8% of the amount allocated. On a $35K allocation that would mean a loss of $2,800. The worst-case scenario is a massive stock market decrease immediately after entering a new position. The longer the position is held without a big market decrease, the less likely a big loss is to occur. When a big loss does occur, it's typical to have some quick wins afterwards if volatility reverts quickly, which recoups some/most of the loss fairly quickly.

[@projectfinance]

I allocate a far smaller percentage to the VXX strategy. Max 2.5% of the account.

[@sureshjogia876]

@@projectfinance yes, I agree with all that you have said, but may be I should have detailed this question. My traded are mainly cash secured Puts. I can do this using SPY or SPX and get the market diversification. But what's your view on doing CSP on utility stock, and bank stock and few other sectors, and even throw in TLT. They will move differently. I love the idea of allocating just 35%, but then what do you do with the reminder of the capital?

[@projectfinance]

Whatever works for you. The rest of the money in the account is cash unless I open up a new trade. Right now the average allocation has been 35% but I am going to scale that up to a higher allocation.

[@3EBstudio]

thanks again..

[@atsgis]

Excellent Video. Very informative.

[@projectfinance]

Thank you!

[@glennscheive]

what is the definition of rolling an option trade

[@projectfinance]

Closing an existing position and opening a similar position at a different strike and/or expiration. Typically in the same transaction. An example would be if you had a short put with a strike price of $50 in the January expiration. An example of a roll: BUY the 50 put in the Jan expiration (closing trade) SHORT the 50 put in the Feb expiration (opening trade) The above would be a rolling trade and you could do both trades in one transaction/order.

[@breezefor5966]

Very nice video as always :)

[@projectfinance]

Thank you for the feedback! I appreciate your continued support! -Chris

[@northeastbirdsmore2281]

3 questions.. Do options trades have the same settlement periods as stock purchases? ie: T+2. T+3 etc What's your preferred time to hold Do you ever take the long options like 200+ days? I lied..I have 4 questions.. You said you had 35K in use Does that mean you're purchasing multiple contracts of the same trade?

[@0mym]

Thank you

[@aaronflynn7831]

11:40 "Trading should not be stressful." Well said.