Call Options Explained: Understanding Short and Long Calls

[@RyanOConnellCFA]

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[@ahmedyoussef5708]

best video to explain options on youtube

[@RyanOConnellCFA]

Thank you for that!

[@joylee78]

second that

[@RyanOConnellCFA]

@@joylee78 Much appreciated!

[@usha2007]

This was the best, simple, basic video! Thanks, was very helpful.

[@RyanOConnellCFA]

It is my pleasure!

[@krishiramsundar6153]

Thank you so much, just learning about options contracts in Uni and this really helped!

[@RyanOConnellCFA]

Glad it was helpful! Thanks for the feedback

[@emmanuelgaima9440]

God bless you, bro. Needed this.

[@RyanOConnellCFA]

My pleasure! Thank you

[@lolagarchette5570]

Best explanation, thanks!

[@RyanOConnellCFA]

My pleasure!

[@cvbfghrtyu]

Thanks a lot for the video, I couldn’t get this topic when a uni professor explained, so I came here :) I have a small question. When we are talking about short call, what is the nature of the losses below zero: are they real losses (f.e. we need to pay someone) or that losses are like opportunity costs?

[@RyanOConnellCFA]

It is my pleasure! In a short call option, losses below zero are real financial losses that you need to pay. For example, if you sold a call option for $5 with a strike price of $50, and the underlying stock price at expiration is $60, you're obligated to sell the stock at $50. This results in a loss of $10 per share (the difference between the market price and strike price), minus the $5 premium received, totaling a net loss of $5 per share.

[@cvbfghrtyu]

Got it, thank you🙏🏻

[@RyanOConnellCFA]

@@cvbfghrtyu My pleasure!

[@manfulgloria4785]

Best explanation ever

[@aurinator]

So Covered Calls are Short Calls going by these definitions..? The way I learned to do the Wheel is sell Covered Calls when probability favors the underlying security appreciating in value, and Covered Puts when depreciation is favored viz. when you expect it to go down.

[@stayingclassy]

Great video! Helped a lot! What about strategies?

[@riceballdonut847]

Thanks for the explanation. I have a quick question (sorry if it is stupid, Im new to this). Regarding Long Call Option profits, this is assuming the option is EXERCISED. So can we still profit if we sell the option at a higher strike price before expiration?

[@RyanOConnellCFA]

Hi @riceballdonut847, that’s a great question and not stupid at all! Yes, you can definitely profit from a long call option by selling it before expiration if its market value has increased, regardless of the strike price. This is true for both American and European style options, though American options offer the additional flexibility of being exercisable at any time before expiration, potentially providing more opportunities to profit. Selling the option can capture the gain without needing to exercise it.

[@majorboi8863]

thanks man

[@victoricus1]

thank you, the explanation is very clear

[@RyanOConnellCFA]

Glad it was helpful! Its my pleasure

[@mohammedlayes9248]

Hello, thank you for this channel! Where do the words "long" and short" come from? I just don't understand why these words are used?

[@RyanOConnellCFA]

The terms "long" and "short" in options trading originate from general investing terminology. When you're "long" on an asset, it means you've bought it with the expectation that its value will increase, similar to holding a stock or call option anticipating growth. Conversely, "shorting" implies you're betting against an asset, like when you sell a stock or call option you don't own, hoping to profit from its decline in value.

[@mohammedlayes9248]

@@RyanOConnellCFA ..... Ahhhhhhhhhh!!! That makes sense!!! Really appreciate you time answering the question. Have a great day!

[@RyanOConnellCFA]

@@mohammedlayes9248 Its my pleasure! You have a great day as well

[@t.on.y]

Your channel is very underestimated. Thanks from Russia!

[@RyanOConnellCFA]

Really appreciate it! I post a lot of niche videos on topics that very few people are interested in haha

[@jianshue9240]

so basically we should always do long call and never do short call?

[@bobirnasimov9421]

God damn, cant believe this is free. cant find it for money in my region)

[@RyanOConnellCFA]

Glad to be of service!

[@josephukedaddy0548]

Great lesson, but..... worst handwriting ever!😂

[@RyanOConnellCFA]

Lol at least it still got the message across!