Before You Buy a Stock Option - How They Work and Why They're High Risk

[@ThePlainBagel]

Happy Friday everyone! The first 100 people to use this link (or use coupon code BAGEL50) will get a free week of Noa's premium subscription, plus 50% off the annual fee: www.newsoveraudio.com/bagel

[@FoxInTheBasement]

Investing Guru: "Well you see, you put a small amount of money down based on your theory as to the way things are gonna go. You make a large amount of money if you guess right and lose it all if you guess wrong." Me: "Oh so it's gambling"

[@fedem8229]

It's like playing poker, you can be very good at it and profit most of the time, but it takes just a bad streak to blow you off

[@tophatv2902]

@The plain Bagel bot alert

[@menumlor9365]

Let’s not forget that if the investing gurus is a young kid with a Mohawk that’s a red flag.

[@livewire98801]

@Luís Andrade It's exactly like gambling. But, if you know what you're doing, it's like owning the casino.

[@livewire98801]

@Luís Andrade That's not how gambling works at all... gambling is never random. There's always an edge and the casinos always ensure that they have the edge. Look at any casino game, they have well known and documented odds of any event happening. Then the casino sets up breakevens and strategies in their favor... When it comes to options contracts, its exactly the same way. The fundamental price of an options contract is based on the likelihood of a stock price movement in either direction in a particular amount of time, and the premium is based on that math. If you educate yourself and set up proper strategies, you play the casino hand. If you don't educate yourself and yolo naked calls and puts well out of the money, you play the poor sap that walked in the door because of the flashing lights and cute waitresses.

[@HowMoneyWorks]

What I am hearing is I should remortgage my home and pile it half into SPY call options, and half as an offering to the Holy Powell and his QE superpowers. Literally can't go wrong.

[@ThePlainBagel]

This is why you're in the field - you really know how to read between the lines to extract the true teachings, well done!

[@georgesmith4768]

Just in case anyone had not figured out why this does not work themselves: The people selling you the call option will charge you a large enough fee that you won’t actualy make larger expected return than just buying SPY. No free lunch!

[@HowMoneyWorks]

@@georgesmith4768 Why you gotta ruin my dreams? I had already picked out my new Ferrari!

[@chossmedia]

@@georgesmith4768 This isn't true what so ever, options give you more leverage. He said this in the video and it's correct. Looking at SPY, which is currently $409.40, a $412 strike call which expires on 5/3/21 is $398. If SPY goes up to $420 on expiry, the call will DOUBLE in value and a share would be worth only 3.1% more. The reason people lose so much money on OTM calls is that if SPY went up only to $411, the call would be WORHTLESS while the share would be worth 0.5% more. People on wall street bets buy a bunch of OTM options, hope for some massive move in the underlying, it doesn't happen, and they lose everything. Of course if it does they are rich since again you get more leverage.

[@rogergeyer9851]

BTC fanbois (etc) would disagree with what you should do with at least half of it.

[@bitlong4669]

I like to think of options as lottery tickets (calls) or insurance policies (puts)... in either case the ones who make money are the lottery operators (call sellers) or insurance underwrites (put sellers).

[@sigmazeta8]

I just have to say, your first video about options was actually extremely helpful to me

[@ZhangtheGreat]

If you're going to trade options, BE CAREFUL! I'm new to them in general, and I made sure to load up on as much information as I can before I started trading them for real. Believe me: they are NOT for the faint of heart. It can wreck you when you see your option losing money, because the loss can come just as rapidly as the gain. I'm fortunate that I haven't lost money on them yet, but I've come close, and if not for setting limits to sell them and strokes of luck when the price brushed those limits, I'd be down by a lot already.

[@weirdsecrets5305]

Hey where did the plate with the bagel go? Thats like the icon of your channel you can't ditch it!

[@Lourd-Bab]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[@Bestjudy001]

Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks

[@Lourd-Bab]

@@Bestjudy001 However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.

[@Bestjudy001]

@@Lourd-Bab Oh please I’d love that. Thanks!

[@Lourd-Bab]

@@Bestjudy001 Clementina Abate Russo is her name

[@Lourd-Bab]

Lookup with her name on the webpage.

[@Kevin_Street]

Thank you for this video. I saw the first one, but I really appreciate this more in-depth return to the topic of stock options. Especially the part about the downsides!

[@yeetleslaw8529]

Great timing! I have been terrified of buying options and I felt temptation today. Good thing I hate losing money, you just talked me out of it.

[@joputhiyaparambil07]

@The Plain Bagel Can I ask you something? Are people still falling in this cheap trick?? 🤷🏾‍♂️🤷🏾‍♂️

[@gabrielgan2971]

@@joputhiyaparambil07 I hope not. But I think most ppl aren't dumb enough to fall for it.

[@ravivg1]

Thanks! Very clear explanation. I'm just confused about your example at 9:50. Why would buying the call option make you more money than buying the stock and holding when it moves up? In your example you mention 20% return on a $1000 investment (100 shares at $10) when the stock goes to $12; so far makes sense. Then you say with the call option you make $1000 which is a 100% return. But your example then moves to show buying 1000 shares for $10000, then paying $1000 in premium, and profiting $1000, which is just a 10% return, compared to 20% if you bought the stock.

[@UmTheMuse]

Yeah, this part isn't right. "Doubling your investment" assumes that you sell the option, rather than exercise it. If you're buying the call option with the expectation of exercising it, you're effectively saying you want protection just in case the price per share drops to less than $9. In that case, you've limited your loss to $1. The leverage in the example is how much you risk versus how much you make.

[@deltabeta5527]

Please, make a video in this similar style explaining Shorting

[@deltabeta5527]

@The plain Bagel Fuck you Imposter 🖕🏻

[@maxr9136]

Thank you for the good video! I heard that some people buy LEAPS (1-2 years) deep in-the-money (0,7 delta or more). Looks like you buy 2x stocks for the same price with fixed downside. But as soon as not all people do this I think there is something that I miss in it. What's the downside of this strategy?

[@UmTheMuse]

70 deltas suggest that you have 70% chance of getting at least your money back. That's 30% chance that you will lose everything every 1-2 years. In a decade, then, you can count on losing everything. 70% * 70% * 70% * 70% * 70% = 16.8% chance that you get your money back or better if you choose 2-year intervals and 2.8% for one-year intervals.

[@alexlu9564]

@@UmTheMuse assuming there is no change in fundamentals* I like to think of delta how many shares you control a .7 delta would mean you control the equivalent of about 70 shares. Thinking of delta as a percent chance of making money isn't the best way to conceptualize delta in my opinion.

[@UmTheMuse]

@@alexlu9564 .70 does not imply 70% of the value of the underlying; it's 70% of the change in the underlying. This is huge because the effect is nonlinear. In other words, if you own a call option and the underlying goes up a small amount, it is true that your call option will scale proportionately, but your delta will also increase (by an amount known as gamma). This is fantastic when the stock price goes up. My point, though, is that there is a chance that the stock price will drop past your strike price. If this happens, you will almost certainly lose most if not all of everything you gambled (and yes, options are speculative gambles on the underlying when not used for hedging). Furthermore, if you try this strategy enough times, you're bound to have this happen to you at some point, even if the expected value is positive. Please keep your position sizes small

[@alexlu9564]

@UmTheMuse yes I agree with your point but the same can be applied to % of getting money back. However my point was that thinking of delta and using it to calculate that you have a 16.8% of profiting in the long run isn't exactly how it actually turns out when buying leaps. Because even 1 leaps trade can net you 2x or more in return which can offset the price of many years of losing money on leaps. Furthermore buy assuming that delta is percent itm neglects the fact that fundamentals can change dramatically in a few years in which most fundamentals do.

[@UmTheMuse]

@@alexlu9564 If I roll 2 dice what are the odds that I roll 2 sixes? It's always 1/6², no matter how many dice you rolled before. This isn't quite true for options or stock trading because there's no guarantee that each event is independent, but since you can't predict how one event affects another, you might as well treat them as independent events I think. So, even though your outlook will shift the closer you get to the expiration, you can't use that information when you buy the option

[@poisonpotato1]

I don't understand why options would be more around 9:50

[@LooseArrowBoy]

So... Buy more GME, got it! Thanks for the info, always got the gist of options, but was still confused how each party benefits or loses until now.

[@borkyswan5148]

So putting is just shorting with extra steps?

[@vitsadelhole]

no its just shorting for common investors who don't have access or knowledge about other shorting instruments

[@yeehaw5741]

can we please get the sliding bagel back in the intro? i kinda like that more

[@paapa300]

Would be interesting to hear about exotic options

[@ThatGuyJoss]

Can you link the og video?

[@aidanveldsman9910]

Stephen Merchant's getting really good at his American accent

[@hugomeza2910]

I don’t understand why would I buy a PUT Option and pay a premium. I can just put a stop loss order or sell my shares if I don’t like how the price of the stock is falling.

[@kuroexmachina]

welcome to the casino

[@queeddity5450]

This is very complicated to me. Since I am no seer, I’d rather play cards if I were to gamble. XD

[@mariocardenas721]

Average retail option trader: "I watched a few youtube videos, read an article or two, and I think I can trade options. How hard can it be? I can only lose what I paid for in premiums right? I'm going to be rich!" Me: "Have you read a book? Did you even understand this video and the one before it? If you haven't read any or don't really understand this, what makes you think you can understand the underlying asset this security is derived from?" Trader: "Screw you old man!" Me: "I'm a Zoomer you idiot."

[@NotShowingOff]

Options, margin trading, short selling, momentum investing. Many ppl use these words to seem important.

[@highsol222]

Does anyone know why when the price of a stock is low I'm still paying top dollar for an option sometimes? and like 2 days later that contract is like $200 cheaper -_- How can I find well priced options? Because from experience, there is CLEARLY more to it than just "the price of the stock". I mostly do LEAPS or 3 months out, almost always ITM options.

[@proftre1]

You kinda answered your question. Long expiration dates and ITM strike prices tend to have higher premiums because they are viewed as “safe” and (sometimes) guaranteed to be exercised. To get cheaper contracts maybe go for contracts AT THE MONEY and a little less time for expiration.

[@UmTheMuse]

I don't know the whole answer, but I think there are two parts. One is the way options are displayed. When they show your profit/loss, it's based on the mid-price for closing position (if you buy the LEAP, what you paid minus the premium to sell the LEAP, assuming you get the price halfway between the bid and the ask). The other part is that a large part of the price you pay is based on anticipation of the stock value. If the stock hasn't risen much, but the company is expected to do really well, the call option will command a higher price. This is captured in its IV.

[@highsol222]

@@proftre1 Hmm gotcha. I'll give that a try.

[@menumlor9365]

The real winners of these options traders are the institutional investors and hedge funds that made people believe options is easy and allowed commission free trading to happen.

[@devin19222]

It is easy, but people ignore the actual potential uses that make sense and instead just go for the highest potential regaurdless of risk. Trading in general is misused. You want to make money trading? Trade against yourself. Your long in a position and plan on sitting there for 5 years. Never sell. But using a seperate portfolio worth 5-10% of your investing portfolio, you can use leveraged positions to go the opposite position of your long position. If you got a feeling things will go to shit for xyz reason, you then trade on that, at a lower cost than your long would go up consitently. So in this position if your right you cover yourself maybe even at a profit depending on the tools you use, and if your wrong, okay you lose on your trade was the orginal plan of profiting from your invesment. but again why do that when you can chuck it all into trading? You can make more! And with that last thought once people have that they already lost and unfortunatley thats where almost everyone starts.

[@ryans5155]

What about LEAPS reeeeeeeeeeeeee

[@tenou213]

Ahh yes, options. The driving force of wsb disaster memes. We salute ye brave soldiers who have lost multiple portfolios for our amusement.

[@francisco-id9zg]

Your discord was being very racist to me we where supposed to be talking about econs

[@Blank332]

I rarely comment on videos; however, I had to given that one of the comments he showed was "Why does this guy look so much like Conan O'brien." Props to you for giving me a laugh

[@rodrigoizaguirre9578]

Yeah I know right?

[@rodrigoizaguirre9578]

Hey is this the scammer?👆 his p is lower case

[@stressedbyamountainofbooks]

@@rodrigoizaguirre9578 yes

[@coyrex1250]

He looks more like Steve Merchant to me.

[@Coolsomeone234]

no no nonono nonono no no no no no nono nonono no no no no nonono nonono

[@Coolsomeone234]

Just testing

[@HowMoneyWorks]

Yes ( ͡⚆ل͜ ͡⚆)

[@babyyoda1898]

@@Coolsomeone234 nooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo

[@blongshanks77]

All this video did was confirm my decision to not do stock options. Long term investing is the way to go for me.

[@vitsadelhole]

well as you become more experience with investing you'll learn a great use for options can be to buy "insurance" for your stocks. For example, if you owned 100 shares of SPY and it is trading at say 300$ right now which puts its total value at and you thought there is a chance a large downturn in the market will happen in the next month like what happened with covid. you could buy options put which might cost you 600-1200$ and what that does it is Caps your potential downside like if the market were to tank 30% like it did last year. so instead of losing 10,000 in one month, you would have only lost your premium and the difference between 300$ and your strike, and even better now that you have sold your shares at above market value you can buy even more. And if the market doesn't crash your only out your premium, so its a great way to hedge risk in the event of large market turmoil

[@covercalls88]

Actually, buying options except to close a position is a tough road. As 4 out 5 options expire worthless. I sell short term calls and puts and let the time decay work in my favor. My average is 9 out of 10 expire worthless so I collect the premiums every week.

[@johnybravo5667]

@@vitsadelhole Its just that 30 % market downturns happen like once every 10 years. Paying large premium over and over again would incur more loss to you in the long run.

[@Interestingenough4]

Yup. I'd say if you're gonna do stocks, buy the darn stock.

[@darklight6921]

@@Interestingenough4 so sell puts.

[@CaseyBurnsInvesting]

The gambling mind focuses more on the good more than the bad. Great video.

[@stressedbyamountainofbooks]

@The plain Bagel fake

[@gabrielgan2971]

@The plain Bagel Eww stop impersonating KZbinrs

[@charu2059]

Hi scammer bot.

[@Poincare2024]

that's the mind of someone desperate, not of a gambler

[@jaro551]

@@armenstaubach9276 Wait what? Are you saying it's not gambling because it's legal?? Because gambling is legal...

[@stevejurgens9836]

Options are like jet fuel. If you know what you're doing, they can be a very powerful tool. If you don't know what you're doing, they can blow up in your face.

[@levnikitin7432]

U cant know what ur doing tho

[@stressedbyamountainofbooks]

@The Plain Bagel fake

[@Mosesusorer]

@The Plain Bagel how’s the weather in Lagos Nigeria this morning??

[@Bryan11210]

Jet fuel isn't flammable in most conditions though.

[@spinloki]

@@levnikitin7432 If you own 100 shares of a stock and are worried about it going down, you can buy a put that guarantees you the ability to sell at that strike, even if the underlying plummets. You can then sell a call against your 100 shares to offset the cost, which also limits your upside. This is called a "collar" position and is actually far LESS risky than simply owning the shares, because you trade unlimited upside for far more limited downside.

[@JackDuffley]

Options are an especially useful tool as a smaller part of a broader portfolio. But many people seem to have a portfolio of exclusively out of the money YOLO options lol

[@highsol222]

To be fair, my deep ITMs became way OTMs lol

[@tophatv2902]

@The Plain Bagel bot alert

[@Eduardobarthwe]

@The Plain Bagel fuck you, bot.

[@devin19222]

@@Eduardobarthwe lmao, thats like saying fuck you wall! Get out of the way!

[@Eduardobarthwe]

@@devin19222 Yeah, but it still felt good.

[@tylerpeterson4726]

The first option I ever seriously considered buying was a put on GME earlier this year. It would have made me a lot of money, but I eventually decided against it. Totally unprecedented market conditions aren't a great time to get started in options trading. Nothing wrong with being very cautious with options.

[@FinancialShinanigan]

All these gurus showing off their option wins while conveniently hiding their losses

[@Cat-zc8nj]

Not gonna lie, I miss the actual sliding bagel. Can we get that back please? 😔

[@mr.marketoriginal3808]

Stock options are powerful: they can help you fly or destroy you. Respect!

[@stressedbyamountainofbooks]

@The plain Bagel fake

[@bidensson4643]

I found my biggest problem with options (as an amateur) is that the more successful I become, the more I "bet" on a company. Then I lose all progress I gained. When I trade options, what has helped me is to just trade 1 or 2 contracts at a time (since I'm not working with a ton of buying power). Options have become a really nice source of income though. It helps a student like myself make a few hundred a month.

[@mites7]

position sizing is the number one reason people blow up accounts by yolo-all in bets Actual option traders risk 2% at a time and have max 30% exposure, and are mostly net sellers not buyers (outside some controlled trades like debit spreads)

[@Bondanalloy]

don't buy options. sell premium. be the casino.

[@Bondanalloy]

@The Plain Bagel you're shit.

[@vitsadelhole]

or just be really lazy and buy covered call etfs and just let someone else do it for you for a 1% fee

[@deevog]

Pro using a Buying Put to hedge and sometime if they feel Market too bad they just Buying Put , normal peoples using for quick money, in short time without knowing the direction , in a large group I asked few very important questions about Options and only one person answered. I can say 80% peoples don't know about options but they doing it

[@mjd2013h]

This video didn't answer the most important question: why you look so much like Conan O'Brien?! Unsubscribed!

[@ikyiAlter]

I think Plain Bagel is the best channel I found about investing. Richard actually educates me rather than telling me to invest blindly. Or flooded with a masked ad. 😑

I think you did a good job here explaining it to beginner investors! 👍

[@brethitmanhart275]

Bermuda option: Am I a joke to you?

[@Jamey678]

If you’re new, you’re gonna want to start out buying puts or calls, doesn’t matter, as long as make sure you’re buying out of the money options so you can later get *in* the money, which is where you want to be and please don’t do any of this.

[@ArktosBears]

I'm surprised there wasn't much discussion of option strategies - these are some of the key reasons options are so popular. Individual options are pure risk, but option strategies are AMAZINGLY USEFUL and can be fairly safe (i.e. zero cost collar) On an unrelated, is there a reason this channel doesn't talk about asset classes other than equity, such as bonds? I imagine some basic education on bonds would be quite useful for the average boomer investor

[@arielsanchez4690]

Thanks for sharing your thoughts! Leveraging money can be great but it’s possible to lever yourself off the face of the earth

[@cirodirosa6752]

Great video, I only sell 'covered call' 15%+ strike price options on my consumer staples stocks to boost my returns. If a such a 'slow' sector stock tanks, I get to keep my stock (as I would for the long term) If a such a slow sector stock hits 15%+, then, I will be forced to sell my position. This is fine as selling would have been intentional anyways to re-balance my holdings away from a such a crazy increase) Only if all consequence is intentional.. I would recommend options.

[@funtechu]

Good overview of options, and definitely one I'll point people to in the future. One thing I will add for anyone that is new is that there is a ton of nuance with options, and you really shouldn't dip your toe in until you have spent a substantial amount of time learning and understanding options. You need to know your fundamentals down cold.

[@hanshintermann1551]

Me, not planning to ever buy options: "Hmm, interesting."

[@harjotsingh315]

Why you don't create a discord group?

[@harjotsingh315]

Do you think I cannot spot scam?

[@BannorPhil]

This was a MUCH better and more understandable explanation than your previous video on options! Thanks!

[@paulbailey2515]

All you need to know about options is: "Never invest in any idea you can't illustrate with a crayon" -Peter Lynch

[@LouWilliams-o5v]

you gotta' explain why they have the right to take bets for later dates like how is it allowed what's the premise behind it - that's what's confusing us beginners

[@PatrikKron]

You have now convinced me twice (once per video) that I does not (yet) know enough to invest in options. I wish to learn though.

[@johnbrownell1]

Why is it 100 shares

[@johnbrownell1]

@The plain Bagel Shut the fuck up

[@blazekaizer9000]

I am a complete beginner who is studying hard to understand as much as I can, have not yet traded but $20. Though I do agree the terminology was a bit advanced in the last video -especially towards the end- but that doesn't take the fact that it's filthy rich in information. I go back to that video a few times a week as I keep learning more. Thank you for this one also

[@goododays1812]

Instructions unclear, GME TO THE BOON!

[@Commando303X]

This video is so much better than your previous on the topic ("Stock Options Explained," posted on August 31st, 2018). Thank you.

[@sugarly69]

Hey man can you do a video explaining swaps? Better yet, one that explains how total return swaps killed archegos management. Credit default swaps, total return swaps, interest rate swaps…

[@cw3le]

Credit Default Swaps are used as an insurance if underlying bond defaults. It is usually issued by the bank and, in case that the company, whose bond you own, defaults on that bond, you get to exercise the CDS, which means the issuer bank will take that bond away from you in exchange for its original value. Of course, as with any other insurance, you also need to pay some premiums to the CDS issuer on pre-determined time period basis and in case the bond doesn't default and you manage to sell it back to the issuer company, you will not get back your CDS premiums that you payed along the way.

[@MrSupernova111]

Unless you trade swaps for an institution this is way above anything you ever need to know. Its also very complicated. I took a college course in international finance and calculating costs/profits on swaps was no picnic.

[@holysmokes6709]

Caution? Nope I only sell my options to degenerate gamblers, more profitable.

[@TheWoahGold]

Theta Gang where y’all at? 🚀

[@smallpotatoe9487]

Tbh probability of Making money in option buying is comparatively bigger than winning an actual lottery. 😂😂 many gamblers are preferring this over buying lottery tickets now lmao

[@rhaegartargaryen9315]

Conan's son is the best financial guru, with the wits of his comedic father.

[@aaronwentzel4145]

Based on your tax bracket, since exercising an option gets taxed as income, you are usually better off selling the option versus exercising it.

[@marthak1618]

I only trade options in IRA/Roth accounts. I took several years to ensure I really understood them. I traded small and infrequently at first which showed me where my knowledge was lacking (haha) without risking much loss. I still mostly trade small but much more frequently. Zero commissions have enhanced my net profitability (though there are still per contract fees). Not having to consider taxes helps too. I use my taxable accounts exclusively for long term buy and hold positions, particularly no/low dividend stocks.

[@bpapao]

WHAT CAN YOU BE LESS FORMAL AND TALK LIKE YOU WOULD IN PUBLIC? at 3:56 you start pretty simple but then you add details that branch off to its own subject (what is per share basis or why the fact thats its an american stock is important? as opposed to what?) then we start thinking about those and your main point gets blurred again, just talk like a normal person

[@JimBob1937]

To be honest, he wasn't very formal. If you don't feel comfortable with an explanation at this level, you may want to steer clear of using options. There are simpler explanations out there, but then they simplify too much. He also covered why American options are an important distinction near the beginning.

[@jmitterii2]

I think options can be very helpful when used appropriately. Writing covered calls and cash secured puts is a nice way to make money waiting to sell the underlying, or waiting to buy the underlying. And buying puts can help lock in potential profits or create a type of stop loss on a long trade. Buying calls... I haven't found a risk off use for those yet... other than if you find yourself holding too many puts for security and not in many or any long positions... they can hedge an unbalanced put portfolio. Create a type of strangle trade.

[@potatoskunk5981]

Calls can be paired with a short position to reduce your downside. Open a short position, buy out-of-the-money calls, and if the price goes up you use the calls to cover your short position and put a cap on your potential losses. Of course, that's a short-term trading strategy, not long-term investment. But it is one way calls can hedge risk.

[@mderil]

As a value investor I started considering to sell put options. I felt that in your video you touched only upon buying options. Have you considered to make one about selling put and call options?

[@JcadeH1]

Why does every boomer talk about buying a put to protect their shares rather than selling a call

[@ThePlainBagel]

Selling a call doesn't protect your shares; it will actually just cap your upside potential! If you own a share and sell a call option, and the stock price falls, there's no protection. Yes you generated a premium but your options does not stop your share from losing 50% or whatever. If the stock price rises, however, the option will be exercised and you'll miss out on the gains, which will all go to the option holder. So with this combination the only benefit is that you'll have lost a BIT less money thanks to the premium if the stock crashes, but it does not really hedge your exposure.

[@rabidlorax1650]

Also you can sell covered calls, it’s my favorite options trade. It only limits upside potential for owning a stock, but in every other case besides a lot of growth in your stock, you will make more money than someone simply holding it without selling covered calls. Even if someone makes a bunch of money off of the call you sold, you will still make money.

[@nothingisawesome]

people say those comments on every options video. dont worry, its not just you

[@GlutesEnjoyer]

No offense but if you’re yelling at bagel here about how his video was too complicated then maybe you should genuinely consider not trading these financial instruments

[@livwake]

Tbf I have no intention of doing options but I’m still curious about how they work

[@thyruos6499]

I just sell covered calls on stocks I own, with strike price of what I would've wanted to sell them for. I also sell put options on stocks I want to own, with the strike price I'm already willing to pay for the stock.

[@bobwaka1]

Same. Like why not get a guaranteed 1-2% premium of cash with a 10%+ gain sale price locked in. Like, oh no my contract got exercised and now I have 12% more cash on hand to reinvest whatever will I do.

[@SpidermansSymbiote]

I'll just stick to my broad market ETFs

[@jy3484]

Sure maybe when I'm middle aged. But if you're a recent grad, younger chad? It is the time to take risks, learn from mistakes, as you have more time to recover from losses. Maybe overtime both types of investor will end up the same, but one of them can recognize risks, trends and analysis market better than the other. Also, you can buy total equity ETFs and utilize options to generate income, or use the leverage provided in the option to hedge against your equity position (I.e commodity ETFs, Bills, Gold.. etc..).

[@fsmoura]

Too complicated. Even if you speak at a 9th grade level, it's too advanced for me. You need to speak at a 5th grade level. But props for looking like Conan O'Brien. 👍

[@muhammadyusoffjamaluddin]

No links? Disappointed...

[@donovan_lf]

Rolled my gme calls into cciv leaps, dont buy weeklies and you'll be fine, sell them if you have enough money. Pay attention to the greeks, delta and theta especially

[@jackxiao9702]

So anyway, I started buying options. Bang Bang Bang, I don't predict so good, so I lost all my money,

[@ClarenceEwing]

Most reputable brokerages will not allow retail traders to write naked options unless they are at a certain trading level, i.e. not a beginner. And for good reason. There's probably not a better way to lose a lot of money quickly than this strategy.

[@johnnydaoud4126]

I know u have discussed Bitcoin before, but is it possible to re discuss the topic specially with so many changes happening

[@santawarrior9]

Only made it through 1/4 of the video. Time to take out some student loans and join the casino

[@-xziaz-7839]

hahahaha

[@jy3484]

Or join the theta gang!

[@chossmedia]

You didn't really touch on the real reason people lose money on options. Which is that they buy OTM with a short expiry, a massive move in the underlying doesn't happen, and their options steadily degrade in value and then expire worthless.

[@TheNORegretShow]

Great video. But none of this applies to me. I am on autopilot and an defensive investor. Market goes up ok,Market goes down ok,Market goes sideways ok.

[@TheNORegretShow]

@@K3end0 Read The Intelligent Investor by Benjamin Graham. You will know what I am referring too.

[@muhammadyusoffjamaluddin]

This vid should be how to... eToro. they use Put and Call for their buy and shorting, to sell? a little harder to reach.

[@phizzhead53]

11:19 the amount of people buying FD's have probably made options more profitable for smarter investors😂😂😂😂😂

[@ucantSQ]

Advanced tools for professionals? Was that the intended lesson? I think most people know that part. Caution, prudence, or humility are perhaps the missing pieces?

[@MrLeo625]

I find your channel very insightful and funny too, keep up the good work 👍😂👍👍👍😂

[@williamstockwell4663]

🤣🤣🤣 my head hurts non-stop anyway. I'm a high learner. Yes I have an idea,just afraid to make my first move without understanding first.

[@dev4statingx90]

Basically guys, with shares you can buy and sell anytime you want. With options you're locked into the price and if it goes south, you can't sell it and you'll lose your money

[@lezamac6]

Can you give an actual example how to buy, do we need that money before we buy for example I am looking at buying a call, but says i need $700 or $3000

[@litojonny]

HOLD GME

[@pablofernandez2894]

So... the danger with theoption is when you use all your money to pay for the premium of a huge bet. Ok. But if you dont do that, the risk is like 10 times less. Seems interesting. I think to put all savings into paying a premium is madness and is not the normal use of the option. It is like incel mixmaxing and then being throw into the Golgota.

[@themightyantgaming2656]

i knw im late to the party but with the part about selling naked call options. For my information retail investors mostly wouldn't be able to do that due to high margin requirements from brokers and so many sell covered calls, so that their risk isn't infinite but what they paid for the shares. I think that is a big diff in doing a naked call and a covered call and anyone that does option trading should look into the risks for them. Also i try to keep option trades less than 20% of my portfolio so that "all my eggs are not in one basket"

[@persinitrix]

Hello fellow WSB degenerates. I am also taking steps to curb my habits

[@Magic_beans_]

1:45 That should be a sign right there. If an introductory video is over your head, maybe you’re not ready to jump in yet.

[@amyx231]

I sold cash secured puts. On BBBY. Yeah, didn’t end well.

[@huzayfah]

Any chance you could do a video on value averaging Vs dollar cost averaging? Vs lump sum investing. I've seen many pros and cons of value averaging, some saying studies are pretty much unanimous on my being a better method of investment and other people claiming it doesn't account for liquid cash deposits on the side that can't be invested. I'd love to hear your thoughts on it. Thanks

[@JamesShack]

*Good Explination*