Learn Call Options and Put Options - Introduction to Options

If you ever wanted to learn about Options and Options trading, but found it confusing, start with this awesome course

Created byHari Swaminathan

Last updated 12/2019

English

What you'll learn

Learn the basics of Options and Call Options
Understand the basic parameters of how Options work
Understand the differences between trading Stocks and Options
Key objective is to provide a strong foundation for continued learning in the more advanced topics in Options trading
Learn about In-the-Money, At-The-Money and Out-of-The-Money Options
What is Intrinsic value, Extrinsic Value and Time value
Differences between Buyers and Sellers of Options
Risk and Reward profile of Buyers and Sellers
Profit & Loss and Risk Graphs of different Options
Understand how Options are structured in financial markets using Apple (AAPL) Options as an example
All of the above applies to both Call Options (Section 1) and Put Options (Section 2).

Course content

3 sections • 21 lectures • 3h 18m total length

History of Options, and the Mathematics of Options17:44
Options as a financial instrument started trading in 1973 at the Chicago Board Options Exchange (CBOE). This instrument is purely conjured up from mathematics, which is an essential fact to always bear in mind. This lecture is a brief history of those developments starting from its earliest use in Greece in 300 B.C.
Definitions of Options and a Call Option, Factors affecting Option Pricing6:27
Options and Stocks have a very different risk and reward profile. This lecture addresses some of these differences. Please also view the supplementary video attached.
At the Money Options using a Real estate example6:36
Most beginners have a hard time understanding Options because they are introduced with too much jargon. This simple real estate example describes an At The Money Option (ATM) Call option Scenario
What are In-The-Money (ITM), At-The-Money (ATM) and Out-of-The-Money (OTM) Options11:38
In any Option, there are three varieties - In-the-Money Options, At-the-Money Options and Out-of-the-money Options. The real estate example is extended to explain these concepts.
Buyer and Seller risk profiles, Risk Graphs, Seller advantages, Expiry and Settlement4:12
Risk Graphs are a critical component of all Options strategies. This is your starting point for understanding these critical tools.
Introduction to Call Options Quiz
Option screens, Option Chains, Expiry series and Call Option Layout14:40
An Option chain and quote screen can be confusing to beginners. This lecture explains the screens in detail. This is the introduction to the Thinkorswim Options trading platform. Please also see the supplementary video on Option quotes and screens.
Choice of expiry series and ITM, ATM, OTM Options when choosing a Call Options9:18
Real Apple (AAPL) Options are studied and the concepts of ATM, ITM and OTM Options that were discussed in the real estate example are clearly explained using AAPL Options.
Call Option performance in real-time and on the day of expiry7:38
When looking at the Profit and Loss diagram for any Options strategy, you must understand there are two components to this graph - The first is the "real-time" picture which is the line in white, and the second is the situation on the day of the expiry of the Option. This is the red line. It's critical to understand how the white line collapses onto the red line as we approach expiry.
Risk Graphs of ITM, ATM and OTM Options12:10
All three varieties of Options - ATM, ITM, and OTM Options are plotted on a risk graph for Apple (AAPL) Options.
Option Sellers Risk profile9:35
An Option seller is very different from an Option buyer. The risk and reward profile is very different from each other. This is unlike the stock market where the buyer and seller have similar but opposite profiles. In the Options world, the buyer and seller have symmetrical, opposite and unequal risk and reward profiles.

Put Options - A real world example of Put Options - Buying Insurance14:08
Primer on Put Options and brief recap of the Call Option. The Put Options has some special characteristics that are different from Call Options.
Put Options quotes and screens on Trading platform, Risk Graphs, Buyers Sellers8:01
Understanding the layout of a Put Option screen can be a bit challenging for newcomers. This lecture focuses on the layout for Put Options. If you're still confused after watching this lecture, this is normal. Watch how these Options move for a day or two and you'll figure it out.
Risk Graphs for Put Options buyers11:40
The real-world Insurance example is extended to Apple (AAPL) Options on the Thinkorswim trading platform. ITM, ATM and OTM Options are explained in detail.
Risk Graphs for Put Option sellers6:47
We will be repeating this aspect many times because its important. Options sellers are different from Option buyers. Option sellers are THE INSURANCE COMPANY. Their risks are much higher than Option buyers. You can see why this is the case.
Using Put Options Spreads to limit risk8:44
This is a sneak peek into an advanced concept of Options spreads. If you're a seller of Options, you can control your risks and this lecture shows you how. It is normal if you don't fully understand this technique. Option spreads are covered in detail in a later course, but there is more to learn first.
The four strategies BOX - Call and Put Options8:10
We have a total of four basic Options strategies - We have a Call and a Put and you can buy or sell each of them. These 4 strategies make up the basic Options strategies. Two of these strategies are bullish and two are bearish. And to confuse things more, one bullish strategy uses Calls and one uses Puts. To easily understand or remember this complexity, we've created a 4-strategies Box. Also included is a video on how Options can be a much more capital-efficient instrument than Stocks.

Using Options to buy Stock at much lower prices than what its trading for10:36
In this tactic, Put Options can be used effectively to buy stocks that you love at a price that you love even more. This is a very powerful strategy if you already invest into stocks, and you'd like to use Options to creatively buy your stocks.
Using Options to sell Stock at much higher prices than what its trading for7:29
This is the reverse of the earlier tactic. If you already have stocks that are profitable, you can sell that stock at prices that are much higher than what the stock is currently trading for.
Using Options to hedge Stock that you already own10:51
You've heard me say that Put Options are the ultimate protector of stock you own. You can see how this is true by taking a real example.
Introduction to Options - Final
CONCLUSION4:30
This is a recap of the whole course. There are a few key points that I highlight in this concluding lecture that will be very helpful if you always remember them. For example, whenever you think of a Call Option, always think of the real estate example. And whenever you think of a Put Option, always think of the Insurance example. I hope you enjoyed this course and I look forward to seeing you on the next course on Time Decay, Implied Volatility and Option Greeks.
BONUS LECTURE - DO NOT MISS !!7:10
Learn how Udemy bonus lectures, coupon dynamics, and bundled discounts drive access to options courses and related trading tools on Option Tiger.

Requirements

Basic knowledge of financial markets
Some knowledge or experience with Stocks

Description

Section 1 is on Call Options

Most people learning Options for the first time face too much jargon and complex language. This course use real-world examples (buying a house) to explain how a Call Option (Section 1) works in real life. This example should make it absolutely clear what a Call Option is in step-by-step details. The course first defines what Options are, and in particular, what a Call Option is. It explains the differences between Option buyers and sellers, and the differences in their risk and reward profile. Several basic Options concepts like At-the-money, Out-of-the-money, and In-the-Money Options, and Risk Graphs are also introduced in this course. The profit and loss graphs for all three types of Options are explained in clear terms using AAPL Options.

Section 2 is on Put Options.

The Put Option is the ultimate "protector" of your portfolio, and in this course you can learn how Put Options work. It is the exact opposite of a Call Option. Put Options increase in value when the value of a stock or index drops in price. We define what a Put Option, and just like we did in the Call Option, we consider a real-world example of a Put Option. Fortunately, we have excellent examples of Put Options in real life - when we buy Insurance for our car or home, we are actually buying a Put Option. This example should make it absolutely clear what a Put Option is. The course looks at buyer and seller perspectives in a Put Option transaction, and analyzes the breakeven, and profit and loss profiles, all using the real world example first. Finally, just like the Call Option section, AAPL Options are studied in detail to understand how Put Options work.

The last lecture is a recap of the four basic Options strategies (Buying a Call, Selling a Call, Buying a Put, and Selling a Put). This part is usually challenging to newcomers, so this is explained in detail with tricks and tips on how to remember this instantly until you've become very familiar with all the four Options strategies.

Section 3 - Using Stock and Options combo strategies for stock investors.

In this section, three creative strategies are outlined for Stock investors to combine Options into their portfolio strategies.

Use Options to buy Stock at prices that are far lower than what the stock is currently trading for
Use Options to sell Stock at prices that are far higher than what it is currently trading for
Use Options to hedge a Stock position that you already own

What you will master (Section 1 on Call Options)

The history of Options in the financial markets
The factors that affect Options pricing
The formal definition of Options and Call Options in particular
The Rights and Obligations of Option buyers and Option sellers
The fundamental differences between Stocks and Options
An excellent real estate example of a Call Option
What are At-the-money (ATM), Out-of-the-money (OTM) and In-the-money (ITM) Options
What is Intrinsic Value, Extrinsic Value and Time value in Options
The risk profile of buyers and sellers of Options
The advantages for the seller of an Option
How real Options are represented in the financial markets
Translate Options used in the real estate example to real AAPL Call Options on the trading platform
Explains the Option chain, the different Expiry series and the selection of the appropriate Call Option for a bullish strategy
How Option chains are laid out on a real platform
Detailed analysis of an Option seller's position
Demonstrate how the three types of Options work on AAPL Options
Profit and Loss graphs for buyers and sellers of AAPL Options

What you will master (Section 2 on Put Options)

Definition of a Put Option and its rights and obligations
Learn Put Options using a simple real-world example (Insurance)
What is a Put Option and how is it the opposite of a Call Option
Why is a Put Option the "ultimate protector" of your portfolio
A real world example of a Put Option we are all familiar with
How Put Options make money in bear markets
Buyer and seller perspectives of Put Options
Breakeven analysis and Profit and Loss graphs for buyers and sellers
Understand the layout of Put Options on the Thinkorswim platform
Compare real world Options to Options in the financial market
Study AAPL Put Options in detail
Profit & Loss graphs and risk profiles on the platform
The Seller's perspectives in a Put Option

In Section 3, you will master the art of combining Options strategies with Stocks. If you're already a Stock investor, you will learn to create consistent monthly income, as well as learn the ability of Options to protect your Stocks.

TOTAL COURSE LENGTH - OVER 3.5 HOURS

BONUS VIDEOS - 40 MINUTES

TOTAL - OVER 4 HOURS

Who this course is for:

Anyone interested in learning Options trading
Anyone interested in using Options as a source of second income
anyone that intends to make Options trading as a source of long-term income

Learn Call Options and Put Options - Introduction to Options

What you'll learn

Explore related topics

Course content

Introduction to Call Options10 lectures • 1hr 40min

Introduction to Put Options and A real world example of a Put Option6 lectures • 58min

Using Stock and Options combo strategies for Stock investors5 lectures • 41min

Requirements

Description

Who this course is for: