Buying Call and Put Options - Options beginner strategies
4.7 (50 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
447 students enrolled

Buying Call and Put Options - Options beginner strategies

The first Options trades you make must be a Long Call (Bullish) and a Long Put (Bearish) - both are explained in detail
4.7 (50 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
447 students enrolled
Created by Hari Swaminathan
Last updated 12/2019
English
English [Auto]
Price: $49.99
30-Day Money-Back Guarantee
This course includes
  • 3 hours on-demand video
  • 2 downloadable resources
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
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What you'll learn
  • Start Options trading with the basic strategies - Long Call and a Long Put
  • Learn to manage live trades on Long Calls and Long Puts
  • Understand entry points, as well as good exit criteria for trades
  • How to really "milk" your winning trades
  • Learn sophisticated orders like the "Conditional" orders
  • How to optimize an Options strategy for a particular outlook
  • Learn the art of adjustments for Single Options
Requirements
  • Calls, Puts, Time Decay, Implied Volatility and the Greeks
Description

  SECTION I - BUY A CALL OPTION (CHIPOTLE MEXICAN GRILL) 

  Buying a Call Option is the most basic of all the Option strategies and is the most efficient strategy to optimize a bullish outlook on a stock. In this course, we take the example of Chipotle Mexican Grill (CMG) and show how the trade played out. We analyze the rationale behind entering the trade, the risk/reward profile, chart analysis and point of entry, choice of expiry and "moneyness" of the Option, time decay considerations, margin requirements, profit expectations, exit criteria, Greek analysis, its Profit and Loss profile and various other considerations. We provide a 360-degree analysis before trade entry. This is a real trade and over 15 days, and we navigate the trade to its exit point. 

What you will master

  • When should you consider a Stock for a Long Call position

  • What are the criteria for good entry

  • What are the Implied Volatility and time decay considerations

  • What should we look for in terms of changes in Implied Volatility

  • How do we analyze the Pilot's "map" - the Profit and Loss graph

  • Which Option strike price should we choose to optimize our position

  • Which Option series should we choose when buying call options

  • When do we exit - what is a good profit point

  • What external market considerations should we watch for

  • Understand the ROI (Return on your investment) metrics of a trade

 
 
 

  SECTION II - BUYING A PUT OPTION (FXE EURO ETF) 

  Buying a Put Option serves two purposes - exploit a bearish move in the stock or be the ultimate protector of your stock. In this part of the course, we take the example of the Euro ETF (FXE) and show how the trade played out in about 25 days time. We analyze the rationale behind entering the trade, the risk/reward profile, chart analysis and point of entry, choice of expiry and "moneyness" of the Option, time decay considerations, margin requirements, profit expectations, exit criteria, Greek analysis, its Profit and Loss profile and various other considerations. We provide a 360-degree analysis before trade entry. We show you how to "let your winners run" in a controlled manner. 

What you will master

  • When should you consider a Stock for a Long Put position

  • What are the criteria for good entry

  • What are the Implied Volatility and time decay considerations

  • What we should for in terms of changes in Implied Volatility

  • How do we analyze the Pilot's "map" - the Profit and Loss graph

  • Which Option should we choose to optimize our position

  • When do we exit - what is a good profit point

  • What external market considerations should we watch for

  • Understand the ROI (Return on your investment) metrics of a trade

  • How should we scale out of a hugely profitable position

 
 
 

  SECTION III - STRATEGY AND OPTIMIZATION 

  The Option strategy optimization course brings all the 4 Options strategies together. The 4 strategies are comprised of 2 bullish and 2 bearish strategies, but how and when should we choose a particular strategy over the other. We create a helpful "4 strategies box" to distinguish and connect one strategy to the other. Most importantly, what are all the considerations before we choose a strategy. Our choice of strategy depends not only on what the stock is currently doing, but also on various market externalities as well as a few key Option metrics like Implied Volatility.

What you will master

  • How to differentiate between the 2 bullish and 2 bearish strategies

  • If you were bullish, would you choose a Long call or Short Put

  • If you were bearish, would you choose a Long Put or a Short Call

  • Why our outlook on the trade is the most important consideration

  • What are the Implied Volatility and time decay considerations

  • Which Option should we choose to optimize our outlook

  • What external market considerations should we watch for

 
  SECTION IV - SINGLE OPTION ADJUSTMENTS
   

 
    This course studies the need for Option adjustments, and why adjustments are as critical to the success of your position as good entry or analysis. We consider all the four basic strategies - the Long Call, Short Call, Long Put, and the Short Put and look at various adjustments to these positions if they get into trouble. Every investor has a "pain point" - this is the point at which they adjust their position. Applying a rigorous approach to this pain point enables investors to control risk while maximizing the opportunity to profit. The course also discusses various details like early adjustments, over-adjusting and adjusting profitable trades as well as the importance of the investor's outlook for the stock when considering adjustments. 

What you will master

  • What are adjustments and why do we need to adjust positions

  • Why adjustments are a feature of Options that should be taken advantage of

  • What are the considerations for making a good adjustment

  • Are adjustments different for different strategies

  • Sneak peek into "Option Spreads" - the focus of Module III

  • How much of an adjustment should we make

  • What is over-adjustment and why we should try to avoid it

  • How should we adjust when our outlook for the stock changes

 

   

Who this course is for:
  • Those who have a good theoretical understanding of Call and Put Options
  • Theoretical knowledge of Time decay, Implied Volatility and the Option Greeks
Course content
Expand all 15 lectures 03:11:56
+ Long Call trade (Buying Call Options on Chipotle Mexican Grill)
2 lectures 30:05
When do you buy a Call Option or a Put Option ? What are the considerations ? The most important criteria is of course your outlook for the stock. If you feel that the stock is going to go up (based on some analysis), you buy a Call Option, or if you feel the stock is going to go down, then you buy a Put Option. Where Options are different from Stocks is that you also need to have a timeframe for your outlook.
Preview 18:14
We picked Chipotle Mexican Grill as our candidate for the Long Call. Why did we pick CMG ? Any time, you enter a stock, you need a basis or a trade rationale. This is the most important consideration. And once you enter it, you must have preset targets for exit based on current conditions. And its always a good practice to calculate your exit point based upon the Return on Investment (ROI). This is a live trade all the way to exit.
Live long Call trade on Chipotle Mexican Grill (CMG)
11:51
+ Live Long Put trade on FXE - Euro ETF
3 lectures 48:17
Why did we choose the FXE as our candidate for the Long Put ? And how did we do on trade entry ? And once the trade goes in our favor, how can we manage the trade to ride a winner nicely. 
Long Put trade idea an entry on FXE
18:40
Part of good trade management is the ability to protect your winnings. Trading platforms provide us with sophisticated tools to achieve this. This lecture shows you can protect your winnings in a nice trade.
Trade Management using sophisticated Conditional Orders on Long Put FXE
19:19
The trade is absolutely "milked" for winnings. The trade lasts for about 25 days where we ride the winnings with sophisticated order management.
Trade Management on Long Put FXE ("Milk your winners") and Exit criteria
10:18
+ Strategy and Optimization of Single Option Trades
5 lectures 01:00:38
We've always mentioned that a seller's profile is different from a buyer's profile. The risks and rewards are different. In fact the risks are very high. In this lecture, you will become clear why the seller's profile is like that of the Insurance company - low rewards, high risks.
Pitfalls of Short Calls and short Puts
11:40
When dealing with Single Option strategies, we have 4 choices. You can go for a Long Call, Long Put, Short Call and Short Put. How do you choose between these strategies ? Bear in mind, once you consider all the factors, one of these strategies is going to be the ideal one for the outlook, and you must pick that one.
Four Strategy Choices - 2 Bullish and 2 Bearish
19:39
Before entering a trade, there are several considerations - and one of the primary ones is the "trend" of the overall market. This case study analyzes the S&P 500 Index against a few major stocks like AAPL, GOOG and PCLN.
Strategy Case study - S&P 500 Index and GOOG, AAPL and PCLN charts
08:42
Strategy Optimization is a case study on Linkedin (LNKD) - Which strategy is appropriate at this time for LNKD and why.
Strategy Case study - Linkedin Trade Idea
08:34
Similar case study on Caterpillar (CAT). The goal is to become better in identifying good trade ideas and good entries.
Strategy Case study - CAT Trade Idea
12:03
Criteria for Long Options
4 questions
+ Adjustments for Single Options
5 lectures 52:56
Adjustments are the the third leg of Options trading which everyone must master. Adjustments are an art, and some of it will come only with experience in different situations. However, one can get a head start if you know what to look for and what to do. 
Philosophy of Adjustments
09:39
Discussion of the types of adjustments you can make for a Long call position. 
Adjustments for Long Call positions
15:03
This lecture is a discussion of the kinds of adjustments you can make for the other 3 single Options.
Adjustments for Short Calls, Long Puts and Short Put positions
15:42
This is the conclusion of this course. A sneak preview into the next course is provided.
CONCLUSION
05:22
Strategy and Adjustments Quiz
4 questions
BONUS LECTURE - DONT MISS !!
07:10