Options Spreads Bundle- the heart of Options Trading

Master the art of constructing and managing Option spreads, and you have a skill to produce consistent monthly income.
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Instructed by Hari Swaminathan Business / Finance
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  • Lectures 16
  • Length 3 hours
  • Skill Level Intermediate Level
  • Languages English
  • Includes Lifetime access
    30 day money back guarantee!
    Available on iOS and Android
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About This Course

Published 2/2013 English

Course Description

SECTION I - PHILOSOPHY AND DEFINITION OF SPREADS

We introduce all four Options Spreads in this Bundle (Bull Call, Bear Call, Bull Put and Bear Put). This bundle is a very comprehensive coverage of all four Option spreads. Options spreads sit right in between the 4 basic Option positions and the more Advanced level Option strategies. The Spread is the bridge between the basic Option strategies and the advanced strategies. In fact, most advanced strategies are composed of the spreads we cover in this course, so this stuff is key. For the busy professional, Spreads offer the right mix of reward and risk. All 4 vertical spreads introduced in this course are extensions of the 4 basic Options. Spreads add an element of cost control and / or risk control to individual Options positions. Master the four Options Spreads, and you would have acquired a skill that can create consistent monthly income. Additionally, you'll be well on your way to mastering the advanced Options strategies.

What you will master
  • Advantages and disadvantages of single Option strategies - Long and Short
  • How Spreads tackle the negatives of individual Options
  • With Spreads, you can now be a seller of Options
  • The meaning of "defined risk" Options investing
  • Spreads help you control your costs and risk exposure
  • What are the differences between credit and debit spreads
  • Control risk and costs without compromising on Probability

SECTION - II REAL LIVE TRADES ON THE 4 OPTION SPREADS

THE BULL CALL SPREAD

The Bull Call Spread is an extension of the Long Call Option. When you buy a Call Option, you are bullish. The Bull Call spread maintains the bullish element of the Long Call while controlling your costs and has a limited losses profile. Of course, everything is a compromise. But you would probably be willing to make this compromise. We explain why this spread is called a Bull Call spread, and how to address any confusion from these strange names. The risk-reward profile of a Bull Call spread is very favorable. We define why the Bull Call spread is a Debit spread, and study its Profit and Loss diagrams in detail. We put a real trade on IBM and we navigate the trade for a couple of weeks.

What you will master
  • Differences between Debit spreads and Credit spreads
  • How does the Bull Call reduce your costs
  • What do we give up when we put on a Bull Call spread
  • What are the criteria for a good Bull Call spread
  • Put a real Bull Call spread on IBM and understand the position
  • Analyze, simulate the trade through various stages of the trade
  • Put the trade in context with the overall market condition
  • Analyze exit points carefully and execute the exit

THE BEAR CALL SPREAD

The Bear Call Spread is a credit spread, and we explain why credit spreads are a viable way to assuming an Option seller's profile. The Bear Call spread limits your risk. We study the role of Probability in selecting credit spreads as well as Implied volatility considerations and time decay. Time decay is a key component of credit spreads and the Bear Call spread can be an excellent way to generate monthly income. All spreads can be part of the busy professional's playbook, but credit spreads can be especially attractive. We analyze the right criteria for credit spreads, including the selection of the expiry series as well as the individual Options itself. We put a real trade on Amazon (AMZN) and track, monitor and adjust this trade until its exit.

What you will master
  • Differences between Debit spreads and Credit spreads
  • How does the Bear Call spread control your risks
  • What do we give up when we put on a Bear Call spread
  • What are the criteria for a good Bear Call spread
  • Analyze chart and resistance levels for a good Bear Call
  • How do we put Probability on our side
  • The balance between premium collected and time to expiry
  • Put a real Bear Call spread on AMZN and understand the position
  • Analyze, simulate the trade through various stages of the trade
  • Put the trade in context with the overall market condition
  • Analyze exit points carefully and execute the exit

THE BEAR PUT SPREAD

The Bear Put spread can be a powerful strategy for bear markets. The Bear Put is an extension of the Long Put Option. The Bear Put has some specific features, which make it a very attractive spread, and we dig deep into these characteristics. We put a real trade on Netflix (NFLX). The risk reward characteristics of Bear Put spreads are very attractive as its losses are limited. The Bear Put, just like the Long Put is a Vega positive trade, so this trade can optimize a bearish move as well as any upside from Implied volatility changes. The choice of expiry series, time decay effects and the choices of individual Options are also important.

What you will master
  • Why the Bear Put spread is a debit spread
  • How the Bear Put spread optimizes a bearish move in a stock
  • Get benefits from Delta and Vega - double deal
  • Why this is a Limited Losses spread
  • How time decay affects the Bear Put spread
  • Study of Profit and Loss diagrams
  • Plan the trade entry for a Bear Put spread
  • Chart and Stock analysis
  • Plan and execute the exit on the NFLX trade

THE BULL PUT SPREAD

The Bull Put spread is a flat to bullish that profits primarily from time decay, but can also profit quicker from a move to the upside. Its important to pick the right strike prices for the Bull Put spread, as is a thorough analysis of the stock's chart and support levels. In this course, this is what we do - we pick Google (GOOG) as our candidate for the Bull Put, and analyze past price action, support levels and put on a successful Bull Put spread.

What you will master
  • The anatomy of a good Bull Put spread
  • Analysis of stock chart and support levels
  • What is special about the Bull Put spread
  • How does the Bull Put spread control your risks
  • How do we put Probability on our side
  • The balance between premium collected and time to expiry
  • Put a real Bull Put spread on GOOG and understand the position
  • Analyze, simulate the trade through various stages of the trade
  • Put the trade in context with the overall market condition
  • Analyze exit points carefully and execute the exit

MONTHLY INCOME STRATEGIES PRIMER
This is a BUSY PROFESSIONALS SERIES. If you have a regular job, then you need strategies that allow you to focus on your job, but yet create a somewhat stable and reliable income stream from your investments. The Covered Call, which we covered in COURSE I, is an excellent example of such a strategy. In this PRIMER, we dig deep into credit spreads and understand why being an Option seller (risk defined of course - no naked selling) may not be that bad after all.


This is Course IV of a 4-course step-by-step program to achieving Options mastery.

Course I - Introduction to Options - Learn about Call Options and Put Options is a detailed step-by-step explanation of Options, Call Options and Put Options with theory and practical application with Apple (AAPL) Options

Course II - Options Foundation - Time Decay, Implied Volatility and Options Greekswill complete your theoretical understanding of Options.

Course III is Options strategies for Beginners - Buying Call Options and Put Options where we actually put live trades and manage them to their exit points.

Course IV is on Options Spreads - This is the heart of Options Trading. Once you master Options spreads, you have acquired a skill that can generate consistent monthly income for the rest of your life.

Please feel free to browse this page for a complete list of Testimonials from our clients, Blog readers and Linkedin group members.

What are the requirements?

  • Introduction to Options - https://www.udemy.com/learn-options-trading-introduction-call-put-options/

What am I going to get from this course?

  • Learn and understand the four vertical Option spreads
  • Spreads are the starting point to create consistent monthly income.
  • Understand how "live" trades are constructed with strategy, chart analysis and execution

What is the target audience?

  • You already understand Single Options - Calls and Puts as well core concepts like Time decay, Implied Volatility, the Option Greeks and some amount of Probability as it applies to Options trading.

What you get with this course?

Not for you? No problem.
30 day money back guarantee.

Forever yours.
Lifetime access.

Learn on the go.
Desktop, iOS and Android.

Get rewarded.
Certificate of completion.

Curriculum

Section 1: Introduction to Options Spreads
16:21
We discuss the advantages and disadvantages of Option spreads, and why Option spreads can provide vital control with costs and risks. Option spreads are a step up from Single Options and mastering spreads is key to enhancing your learning on Options.
15:37
The Bull call spread is also called a Debit spread and this spread is a direct extension of the Long Call single Option. How does the Bull Call spread tackle the negatives of a Long Call position. And what are the compromises.
09:06
The Bear Call is an extension of the Short call single option. Once you put a Bear call spread, the unlimited risk profile of a Short call disappears. 
09:09
The Bear Put is the extension of the Long Put single Option trade. It's a bearish debit spread and generally has very good reward to risk ratio.
08:07
The Bull Put is a mildly bullish strategy and optimizes a flat that is trading flat. Just like the Bear call spread, the Bull Put is also a credit spread.
Section 2: All four Option Spread Trades (with detailed explanation and trade entry parameters)
22:23
Live Bull Call spread on IBM. The outlook for IBM was determined by Chart analysis and suitable strike prices and expiry series chosen for the trade. 
11:23
Management of the IBM Bull call trade to its exit.
15:00
Heavy technical analysis on the AMZN Bear call trade results in entering the trade above the resistance point for AMZN. 
10:34
The trade goes on a choppy ride but stays within the parameters, and is exited successfully.
12:25
Trade entry considerations for the NFLX Bear Put trade. 
08:13
The trade gets into trouble from the time its put on. At one point, we discussed the possibility of closing the trade, but wisely chose not to do so. 
16:23
The Bear Put trade is optimized when NFLX makes a big move down, and we exit the trade profitably in stages.
11:27
The GOOG Bull Put trade is a play on Probability as well as the fact that GOOG has bounced off its support zone.
06:56
The GOOG trade is very choppy. But it never hits our adjustment point. This is a lesson that you have to give a trade enough wiggle room.
10:22
A sneak peek into the next course on Monthly income strategies. We discuss the criteria that make certain trades qualify as a "monthly income strategy".
06:24
This concludes the course on Options spreads.
Options Spreads Quiz
10 questions

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Instructor Biography

Hari Swaminathan, Options Mentor, Financial markets educator, Trader, Investor

Knowledge. Strategy. Execution.

Hari Swaminathan is the founder of OptionTiger, a cutting-edge Options Mentoring company, and a full-circle educator in all areas of Financial Markets, and developer of proprietary Intellectual Property around enhancing base case Options strategies (which favor the Market Makers) and turns that deficit into a massive EDGE on the trader's side.. Like building a "powerful Strategy for all Option Strategies". Hari is self-taught in Options and actively trading these instruments for almost 10 years. Hari has a Bachelors degree in Engineering from India, and MBA's from Columbia University in NYC and London Business School in London UK. 

More than ever, its become important for normal people to take charge of their financial situation, and attempt to create additional income streams, or build wealth for the Long Run, in a smart, risk-controlled manner. This is precisely my mission. Through Knowledge, Education, and disciplined Money management approaches. Video-based courseware, Practical workshops , a 4-week Live Mentoring program and several other channels.

Let's break down the Options game in a brutal but realistic manner. 

The Pluses

1. Options were invented out of thin air. And the people who invented it won Nobel Prizes for their invention (Fisher and Black). It is purely a "Mathematical" concept, with no real connections to the external except for one, that's defined implicitly  by its deign.. Its the relationship between an Option and any Asset in the real world,.The associated relationship with any asset's price behavior in precisely defined time frames. In common language, it tries to answer a fundamental question underpinning all of humanity. What kind of mathematical model can help us define the risk of certain events happening, or not happening. The model is very similar to the Insurance industry who basically provide the odds calculated bty large and wide samples of data. It's only then they can provide somewhat of an accurate quote, based on Data science, Statistical Modeling and a heavy dose of Probability theory.

2. This gives birth to very complex but interesting  analytical scenarios. It also gives us the ability to model Options with a set of tools like a car dashboard., but much more powerful and sophisticated approaches. In many cases, you don't need to see what the stock or the larger markets are doing. These numbers are embedded in the mathematical formulas that underpin Options.

3. Because everything in Options is defined in mathematical terms, its also important to realize that OPTIONS will always be the same. The math behind Options will always be the same. forever. Unless they discover serious flaws iin the formulas that tries to determine the fair Option price based on the kind of asset, its price action, Highs and Lows as defined in statistical terms over a certain fixed time frame. It should make some amount of intuitive sense, even if you can't nail it precisely at first..Things like Price Volatility in the "underlying asset, the time lkeft for the Option to expire (Every Option is created with a fixed period of life, and all Option die at some time (They expire) . But the short life that many Options go through, its a wild life, filled with roller coaster like adventures,. 

4. As an analogy, you can make comparisons with the game of Chess. You may agree that Chess is a game of "skill". It's a game of strategy and how well you can plan (ahead) to attack, defend or take a neutral position . We also believe that Chess is strategy-focused and depends upon certain mathematical  properties. The reason we know its a game of skill is : Try to play 100 chess games with Kasparov or Anand. Normal people are guaranteed a loss in all 100 games. And why do we know its underlying features are mathematics based L The reason that computers like Deep Blue can beat Kasparov by a majority, and as computer processing power has increased exponentially by many 1000's of times,, the human number crunching powers have pretty much been constant. So today all professional Chess players refuse to play the machine, because while they used to lose to them by majority, today it's almost guaranteed that they WILL LOSE EVERY GAME

5. Lastly Options are just like Chess. They are a "skill set", and requires acquiring a deep set of analytical skills much more so han most skill sets, but can only be  mastered over a period of time. We cannot turn into a Kasparov in a matter of weeks or even a few month. It does NOT work like that. But once you go through this process that can go for 1 to 2 years or more, there is a powerful light at the end of that tunnel. You build a skill set for life which means things like Age or geographical location, Lifestyles, Weather are no longer a barrier to create a consistent income streams strategically regardless of who you are, where you are, or how old you are. This is POWERFUL stuff. Now let's look at the negatives.


MINUSES


Options are easily the most fascinating financial instrument with several upside benefits, but they an equakky powerful set of minuses. 

1. Options have a steep learning curve. Gon't expect to become Kasparov in a couple of months. Or even a year or two. You caan bbuild a Kas[arov or Anand in those timeframes. And why is this important to realize, Because we are playing a Kasparov or Anand every time we enter the Options market. Market Makers who are 99% of the time, the counter party to all Options trades, are Options professionals. with 10 to 20 years with exoerience in Optioms. . The company has entrusted the responsibility of providing liquidity to the market which is a :legal duty" but can have disastrous consequences. While we have hours tp plam our attaacks, the Market Maker literall seconds for a trade. In a normal  day, a market maker can do many thousands of trades. One can omly be in awe of their skills. 

2. If you're interested in Options, sp=o NOT approacg it with a mondset of or rewuirement to ,aking ,omey. This is not only npu goimg to happen, but iys a recipe for disaster. It's like a student of Medicine waning to ptactice thei skiils after 2 monyjs of study, Keepimh with the Chess analogy,, because its the best way to think about Options before you actually know Options. To develop a meaningful batting average, you will need Time, Patience, and Disipline. They domt develop overnight. Ifyou focus completely on the learning ideally practicing on paper money accounts

are powerful, but they have a learning curve. I've broken down all the complexities of Options in simple language that everyone can understand. The courseware uses real trade examples, always highlighting the pluses and minuses of every investment situation. Options provide the best way to take advantage of bull cycles, bear cycles and everything in between.

As someone that has self-learnt Options and through making mistakes, I can tell you Options trading is not something you should take lightly. You will hear people talking of fantastic triple and quadruple digit returns. I'm here to be brutally honest with you - 

- Be very very careful in the first 12 months of Options trading. 

- This is when everyone is the most vulnerable to losing money. 

- Your main objective during this time is to focus on learning this craft and not lose money during this time. 

Having said that, if you can get past the first 12 months and acquire the expertise in a systematic manner, true financial independence awaits.

You can trade Options from anywhere in the world, regardless of how old you are. You never have to worry about job security any more because you have a skill that can produce consistent wealth month after month. 

But you have some serious but exciting work to do before you can get there, and I'm here to help you in this journey. 

Watch my Free Course for Options Trading Beginners where I draw out a detailed roadmap of what this 12-month journey looks like, and the specific strategies you should master during each step of this learning process. 

Watch my Free Mini-courses or my YouTube channel , all of which have the highest quality of education material. 

And join me in my UDemy courses, where I share cutting-edge theoretical knowledge mixed with practical insights, strategy and impeccable execution through live trading examples. 

If you have any questions at any time, please feel free to message me on Udemy.

The order to follow on my Udemy courses

Comprehensive guide to Financial Markets, Investing and Trading

Options Trading Beginners Bundle (3-course Bundle)

Advanced Options Concepts

Options spreads and credit spreads Bundle

Technical analysis and Chart reading Bundle

After this, the order does not matter. You can take any of the courses as per your interest.

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