The Basics of Trading Options - VISUALLY EXPLAINED

[@JakeBroe]

Give this video a LIKE to support my channel! Also check out my entire playlist on Trading Options here! kzbin.info/aero/PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU

[@chrisbrown8748]

This is such a underrated channel, you deserve far more subs than you have and I look forward to seeing this channel grow. Thanks for all the great videos and helpful information.

[@JakeBroe]

Thanks Chris! I just have to be patient. I think eventually the subscribers will come. I appreciate the support!

[@ryanhull9536]

That’s exactly what I was thinking, they’re so incredibly easy to understand. With that, I’m able to retain more information. I feel like I hit the jackpot with this!

[@cicciuzzu5032]

This is sooo complicated! I feel I need to watch each video like 30 times. It's gonna take forever....

[@rhythmsaidha]

Thanks Jake, appreciate you taking my request.

[@JakeBroe]

You bet Rhythm! More videos coming soon on options trading!

[@rhythmsaidha]

@@JakeBroe looking forward!

[@Thedopestceo]

Best explanations of trading options! I Love his teaching methods!

[@electroduval831]

There’s an error on this video Jake. At 5:05 you display a graphic which states “Stocks Go Up, stocks go down.” We all know stocks only go up! Please fix!

[@MrMountain707]

Very well put-together video. I can tell this took some time to plan.

[@zw8682]

Hi, Jake. I just opened a Charles Schwab brokerage account last night. I remember I lost about 50 dollars when I commented on the video about $25K challenge. As of now, I made about 100. If I did not sell my 20 shares of Li Auto yesterday, I might have made about 130. Maybe it's because I am really new to the Schwab account, I feel like robin hood is more user friendly and easier to use. I plan to put some money into SPY and VOO, maybe some for arkk, and treat this as a long term investment account that I would look into as often as I do to robin hood.

[@JaeHPark-so7dy]

Im new to options, great video. Question though, is buying a call and selling a put essentially the same thing?

[@SteveOfTheMountains]

Thank you for these valuable videos Jake. You are the best

[@skylark304]

i do highly appreciate JAKE for your genuine effort and knowledge to HELP people ! YOU ARE GENUINELY RESPECTABLE PERSON and wish your HEALTH AND HAPINESS ! i have increased my basic knowledge from your channel and grateful for such basic knowledge. with regards from a retiree .

[@conureron3792]

My dad played a bit in the commodities option market. We had an Orange Grove and he would try to hedge against FCOJ price swings - especially after a freeze or two in Florida - ahead of when he’d sell his crop of Oranges.

[@JakeBroe]

Fascinating! Yeah, apparently people have been using options for farming like you said for thousands of years.

[@olaowolawi]

Excellent explanation. Thanks.

[@Candychocolove1]

Patiently waiting for the next video 😊

[@JakeBroe]

I have the next two recorded! Coming next week!

[@billionj]

Well done Jake!

[@JakeBroe]

I appreciate that billionj! Cheers!

[@Pie-qs4yg]

Great video but not quite sure how selling a call option is bearish or reverse , how buying put options bullish?

[@ericnazario8486]

Nice video, very educative!

[@dmeezy5hunit]

Jake ! You’re the man!

[@laravancava]

Thank you for the explanation !

[@JakeBroe]

You are very welcome Cava! Cheers!

[@cptrex-7567]

If I buy a call option and it is in the money close to expiration, do I sell a call option with the same strike price if I don't have enough capital to exercise the first call option?

[@JakeBroe]

Hey cptrex! Yes! Generally, I think everyone should close out their positions and not exercise contracts because there are lots of unusual situations that can occur if you let them expire in the money. So if you "bought to open" then you can "sell to close" with the same expiration date and strike price and the two contracts cancel each other and your profit is the difference in the two contracts.

[@That_TSLA_Dude]

WELL DONE JAKE!!

[@JakeBroe]

Thanks Frank! Move detailed videos on this topic are to come!

[@florencioello325]

Can you sell a Put and reverse it by selling a Call before expiration?

[@scadriq2989]

Hi Jake. Would you know/ suggest best platform for option trading in UK?

[@JakeBroe]

Hey Edvin! I unfortunately do now know much about foreign brokerages. Sorry!

[@scadriq2989]

@@JakeBroe no worries. Will watch all Option videos and thank you for lots of useful info. Keep up the good work.

[@venkateshiyer6055]

The most clear and crisp explanation of Options. Excellent!

[@monowerhossain5119]

Hi jake thanks for informative videos. I am new in this stock market? I have lots of question, but for now i want to ask you that i have very small capital to invest in the market. what are the penny stock share i can buy with fidility or robinhood or other platform? it will be really helpful if you answer or anyone can answer.

[@Rawrenzify]

The wheel strategy is my favorite option trading strategy for passive income 📈

[@JakeBroe]

Awesome Yeety! I will be making a video about the Wheel Strategy eventually!

[@johndavidwatts5866]

VTI or VOO? Also, is it worth switching/selling my vanguard account (i only have invested in VFIAX inside a ROTH IRA so I won't incur a taxable event but have to sell since it is a mutual fund) to fidelity for their zero expense ratio fees?

[@JakeBroe]

Hey John! I prefer VOO, but you can't go wrong with either one. If you like being with Vanguard, then it isn't worth switching just for the .03% fund difference. However, if you like Fidelity more, then it would be worth it. Good luck!

[@cherylpa527]

Excellent explanation!! Great video, you really simplified a rather complex topic. Thank you!

[@JakeBroe]

You are very welcome cher! Thanks for watching!

[@lionclan4007]

Okay I am new to the options trading. I found this video very helpful. But here is a very ignorant question. How do I know if a stock has options or do all of them do?

[@JakeBroe]

Every stock has options, but there just might not be anyone trading them. The larger the company (it's market cap size), the more likely people are buying and selling options contracts. The smaller and less popular, the fewer people trading which means options prices form a very wide bid-ask spread and anyone willing to trade with you (a bot) is just there to rip you off.

[@kellib5291]

thank you! you made it so easy to understand!

[@JakeBroe]

You are very welcome kelly! Cheers!

[@cocojumbo197]

Is actual share delivered to you if option is in the money or you close contract and take money?

[@JakeBroe]

You can always close out the contract before expiration for a profit. If you don't, and let's say you bought a call contract, then you will end up buying the 10 shares of stock and it will be in your account.

[@MT-qq1rq]

Jake, you meant end up buying 100 shares not 10, correct?

[@conureron3792]

That does confuse me a bit: e.g. sell a put = obligation to buy the stock.

[@AndrewHosford]

@@STRpros Generally, selling a put means you are writing and selling the put option. You don't already own the option, it doesn't even exist. You're writing it yourself. Er... well, your brokerage is creating it, you're just picking from a set of standardized options contracts that can be created and sold immediately. Just look at a stock's options ladder to see what you can sell. You might do this for hedging purposes, or you might sell the put and use the premium you get to buy some other option to create a more complicated payout schedule. Selling puts and calls is required for a strategy like an iron butterfly.

[@JakeBroe]

My dedicated video on buying puts is coming soon with real world example!

[@huypham3602]

Super pumped for this series. Time to make money this year with Jake

[@JakeBroe]

Thanks for watching Huy! Hope you get value from this series!

[@D.rod_riguez]

by far the best explanation I've heard on youtube

[@JakeBroe]

Thanks David!

[@thecontainerthecontents6889]

is the 500 prememium you pay for these options always a factor of the overall buy? or is it always a 500 flat rate or...

[@johnsnow9232]

Excellent

[@nicks8459]

The names are based on the buy side. If you own a call, it gives you the right to CALL it from someone at a certain (strike) price on or before (at least with American options) the expiration date. If you own a put, you can PUT the stock to someone else at a certain price... Hope that helps explain the names.

[@JakeBroe]

Makes sense! Thanks Nick!

[@Hives2honeyfarm]

I think it should be called , Take and push. Take the option or push it on someone

[@kurtchen4452]

Do you need to own the 100 shares of the stock to sell a call options Contact?

[@JakeBroe]

Depnds on what level of trading you have been approved for with your broker. As long as you have the funds to cover the contract exercising, you don't need to own the 100 shares to sell a contract... but that is very risky and I don't recommend it.

[@tonynguyen6124]

Thank you, you made it really easy to understand.

[@JakeBroe]

Awesome! Glad I was able to effectively communicate! Cheers Tony!

[@sampark1166]

Awesome video Jake. You explanation is easy to understand...

[@JakeBroe]

Thank sam! I appreciate that!

[@purushothamaacharya4752]

your the best

[@JakeBroe]

Thanks!

[@ryionizer3622]

I understand why you would enter into a options contract that would let you sell your stuff for a declared price, this would let you hedge against inflation and loss of value pretty well, But I don't understand why you would enter a contract to let you buy at a specific price when you think the stock will go up. Just buy the stock itself and skip the premiums and shit?

[@jimmynguyen7956]

I'm confused how you can buy a 60 day call contract but the contract expires on the 3rd friday of the month? Can someone help clear this up?

[@JakeBroe]

Hey Jimmy! It all depends when you buy it. 60 days out from today is the time period. There are daily or weekly contracts, but the 3rd friday of a month always has the most volume of trade.

[@deadleague3618]

I’m going to love this series!

[@KevinJohnsonX]

nice clear demo

[@JakeBroe]

You are very welcome Kevin! Cheers!

[@AntonioInvests]

This was an awesome video, I love selling options (never lose strategy) and collecting that premium 😁

[@JakeBroe]

I am all about selling options! I'm not crazy about buying them...

[@coconutmacaroon4907]

I know this is just a basics video but it is important to note that the premium isn't fixed and will most likely reflect the probability of successful exercise. It really is dangerous to buy these things without a clear understanding. The markets are rigged mostly and options more than regular securities. Seriously only two types of people have regular success. Those who know more than the vast majority and those who are lucky. With that being said, thank you for the video.

[@annika2944]

Hi Jake! Thanks for an amazing video. I just have a question if that is okay. I am trying to buy stocks on Charles Schwab but when I try to place an order it says that it cannot be placed. "This order cannot be accepted because this account is restricted from trading." Is this a common issue? I'm not sure what I am doing wrong or if I have to fill out an application to be able to trade?

[@JakeBroe]

Hmmm, is your account balance under $25,000 in equity and did you make 3 day trades in a 5 trading day period? You might have been caught by the PDT rule. kzbin.info/www/bejne/aZzFcoKgqNRpsLc

[@nicks8459]

Yes, look in the top right of your account and you should see something that says Option Level. It will likely say none or 0. I think it's a hyper link that you can click to start the application process for options approval. Good luck buddy

[@JohnWickkkkkkkkk]

Jake has all qualities to be great teacher. He got into wrong profession 😂

[@JakeBroe]

Thanks DUDE! I actually was an elementary school teacher for six years before joining the Air Force!

[@leejmuam1]

🤣 he's in the right profession. He's teaching us about stock.

[@JohnWickkkkkkkkk]

@@leejmuam1 I know but it isn’t his profession. His profession is Airforce. You first learn English then come to stock 😂

[@MT-qq1rq]

Hey good primer video on basic call and put options. Beside option geting exercised, option contract can also be traded if my understanding is correct. Given these two scenarios, is the payout gives the same result? I think trading just the contract is simpler than going through the exercising process. Please share your thought on this. Cheers!

[@JakeBroe]

You are correct Mike! I actually recommend you never hold the contract until expiration. It is almost always better (safer) to buy to close or sell to close a contract prior to expiration to avoid any confusion or complications. The value between the two methods will only vary slightly as a small amount of extrinsic value remains in the contract until the last minute.

[@ticani2]

Not trying to hate on this, but this is like saying “playing against professional poker players in Vegas for beginners.”

[@thecontainerthecontents6889]

confusing af -- this didn't help.