Strike Price - ITM ATM OTM

Winston Wee
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Non Directional Weekly Options Trading System - ETF & Emini

The Art of Non Directional Trading using ETF SPY and Emini S&P 500 Options to gain consistent result

01:49:26 of on-demand video • Updated January 2017

  • Understand everything about options
  • Understanding how to structure a non directional short strangle weekly system
  • Adjustment and using stop loss for the system
English [Auto] Option has expiry and in this as opposed expiry is 20 of me to the 1:06 option. There's a range of price in the picture we can see a price from 2 0 2 2 to 1 2. There's both price of labor and this option expiry and scrap price apply to both call and put option. We can have a call option to expire on 20 of me to the 1 6 with a thread price of 2 0 2. We can also have a put option to ex-spy on 20 of me to deal 1 6 with a strike price of 2 0 2 IDM referred to in the money ETM referred to the money and OTM referred to our MONEY IN THE MONEY option has intrinsic value plus time value also known as extrinsic value. It is very expensive in terms of the cost of the option. It is expensive because it has intrinsic value built into the option and the money option has no intrinsic value and it contained only time value because the money option referred to for price is nearest to what the underlying market is trading time value is the highest for the money option of money option is cheap because our money option is far away from the underlying market and the public of the option expires being in the money is less as compared to the money or in the money option. Therefore Oh funny option is always cheaper in terms of cough with the underlying market treating at 2 0 8. THE END OF MONEY call option will be 2 0. Remember that option buyer has that right by not obligation to buy the share. Last option seller has the obligation to sell the share. If the option become in the money the low and the price the higher the cost because the option is deep in the money to do the roll call option is selling for a dollar and 50 cents because it has a dollar of intrinsic value. Assuming the market remain at 2 0 8 when the option contract expires the to your call option will be a dollar in the money it will be worth a dollar. So the buyer of this call option only lose 50 Cent if the underlying market close at 2 0 8 on the option expiry date. Let's assume it's not a case or call buyer is bullish on the market and think the market will go above 2 1 2 or even higher by that I don't want to buy the 2 0 0 option as it is causing too much at a dollar and fifty cents. And if he's wrong in his prediction he'll lose quite a fair bit. And he's not willing to take that position. After analyzing hitting the best price would be to buy a 2 1 2 call option and another seller come in and think the market is about to drop from the current level of 2 0 8 or maybe just go up a little bit more. But she do not think that the market will go above the 1 2 on the auction expiry date. And he felt that selling the call option with a strike price of two one two is a good bet both buyer and seller and to a contest and we analyze what happened on different scenario on the auction expiry date the FBI close to 0 8 the two want to call options expire worthless and the buyer lose. And Solove if the SVR I close at two or five or in fact as long as to as few I close below 2 1 to the violence and the Solove even when they asked you I closer to to the option still expire worthless and the buyer lose and the seller with wear nice clothes that do want to point to zero. The one to call option is worth 20 cents. So effectively the option is in the money and worth 20 cents and will be exercised immediately. However remember the buyer pay 50 cent for this option and they start collecting back 20 cents. So that position the buyer is still down to the cent and the fellow in in the last scenario as you I close at 2 1 5 2 1 2 call option X-Fi at $3. In the money since the buyer pay 50 cents for the option and now me $3 that gain is $2 and 50. And the seller in this case lose $3 on the option but have collected 50 percent in the beginning. So his losses to all in 50 cent we can see from the above that in the first four scenario the buyer after Option lose almost 100 percent of the investment except for the fourth scenario where the loss is slightly lesser. The fifth scenario the buyer make 250 percent return on his investment. And that is what gets people really excited. While the Salol lose 250 percent but do not start going to the market and buy a bunch of out of money option option. It's all about publicity. To put up to be the opposite of call option if you're unclear on the put option just drop me a message or post on the discussion forum. If there's a need I can do a video on it but it is just the opposite of the call option. Food buyer has a right to sell the underlying market but not the obligation to put seller has the obligation to buy the underlying market. Should he be a sign.