The Basics

Session 1: The Basics covers a detailed introduction to options trading, focusing on the fundamentals of options such as the impact of time, strike prices, and how options are valued. It provides a thorough explanation using metaphors, like the concept of buying a safe with unknown contents, to illustrate how options pricing works.

Session 1: The Basics

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Topics Covered in this session:

1. Buying a Safe: A Thought Experiment to Understand Options
2. Buying a Stock for a certain price, by a certain time: Understanding Calls
3. Time is Money: The effect of time on the value of an option
4. Where to Strike: Moneyness and understanding the right to buy a stock at different values
5. The value of a call: Summarizing the pieces of a call’s value
6. Trading Plans: Reasons to buy a call
7. Flip Side: Selling a call
8. Put a Ceiling on your Stock: Covered Calls
9. Stock Insurance: Puts Part 1
10. Shorting with fixed downside: Puts Part 2
11. Getting paid for your stock buy-limit order : Puts Part 3
12. Summary: The components of an option’s value, Calls vs Puts