Options Explained Easy (Beginners Only) | Options Trading for Beginners

foreign [Music] [Music] what's up YouTube in today's video guys I want to teach you guys how to buy options card options to be specific and how to make money on stocks when you believe they're going to make a move to the upside so do me a favor guys please make sure you like And subscribe make sure this video get at least 1 000 likes and please take some notices I'm going to be teaching you guys entries as well as exits on type of plays you want to knock off the park okay if that sounds good to you without further Ado let's go ahead and dive into it okay class is this session guys and by now you know I try to buy between 125 and at least 1 000 shares of all stocks that I own okay typically on average I like to hold my stocks for one or three years then I like to reassess the landscape the sentiment how the company is doing today's lesson will come from so far ticker symbol Sofi that's currently net nine dollars and six cent guys in the last three months alone it is up over 53 okay with that being said in addition to the amount of shares I have I love to make money on this in any move it makes to the upside and today I want to break down how you guys can do it and what you guys should do on your journey okay let's go ahead and dive into it okay I'm hitting trade and trade options and this brings up the options chain guys and the options chain gives you the chance to select what is known as an expiration date here we have the 21st here we have the 28th here we have August 4th okay and just for teaching purposes these are the dates you can choose which particular option you want to take part in today's lesson is going to come from July 21st that's a week out expiration date okay and then I'm going to teach you guys as well then I'm going to teach you guys the 28th which would means two weeks out starting with the July 21st guys as you see here I have the buy car options selected okay listen you do not have to own shares of this in order to do this okay please make a note of that take some notes classes in session I don't need to own shares to buy a car on a particular option okay now listen to this guys the current price is sitting at nine thousand six cents okay now I am looking at two strike prices and I want you to take your eyes to them I'm looking at the 9 9.50 call which would be a premium of 16 cents or the equivalent of Sixteen dollars and I'm also looking at the nine dollar car which has a 35 Cent premium or the equivalent for one share which would cost me thirty five dollars why is that because with options guys everything is multiplied by a hundred I like to say that everything is a hundredfold when you're dealing with options which is why we make so much money when you have a certain amount of contracts on your journey okay 10 15 20 100 or 200 like myself okay but this is how the money is made because everything is a hundred fold okay so in this particular example if so far is sitting at nine oh six the nine dollar car says that the break even price and the break even is just a formality I like to look at guys and for me it just simply means if you ever got yourself in a rut the stock would need to get to 9.34 for you to break even if it didn't go in your way out the gate okay but with that being said let's go ahead and choose this one okay I'm choosing the nine dollar car guys you have here the Delta on this that looks pretty decent at 0.5 you have the Theta at minus point three okay so look at this we're going to hit Buy and then for one contract this Max cost would be 35 okay and simply put we are buying this because we believe from nine dollars and six cent we believe this will go up at least to nine dollars and fifteen cents nine dollars and thirty Cent anything in the upward direction is what you would be participating at something like this for okay and so one contract you have the asking bid between 33 and 35 okay you can always set your limit somewhere in between now let's just say we want it to set ours at 34. okay somewhere in between the asking bid and that this would fill our order once it got to this particular asking bid limit price okay Boom at 34 we would then be able to get our play in position and then as it moves up we will be making money okay I typically like to see new investors new Traders stay in between at one to three contract range when you're starting out because your max loss is your Max cost so the only amount you can lose is the amount of contracts you have so in this particular case if I was to lose 34 would be all I would be risky all right but in the event that I win guys depending on how high this goes up the winning the money you make the money you earn could be infinite check this out when you go out to July 28th okay this is the benefit of pushing your expiration date out just a tad bit okay we pushed it out one more week further okay so in this first example we had seven days in this example we have 14 days all right and so now you see that same nine and a half dollar car now has a premium of 31 Cent but guess what you also have more time on your side but check the break even out on this one it is 9.80 now South Park has resistance at ten dollars and so you you're you're buying a little more risk in this example the nine dollar car has a premium of 51 Cent okay and the break even on this one would be 9.50 but with that being said when you're buying options the whole goal is just for it to go in the direction you desire it to go so in this particular case we are buying a car that means from 906 we want to see this go to 9 15 9 30 9 50. okay so on and so forth to the upside is what we are looking for and that is how we make our money okay same thing you would hit buy you would go ahead and lock this in now you can do one contract that will cost you 51 now let's put in two contracts for this one two contracts would cost you around a hundred and two dollars okay less than this three contracts would be a hundred and fifty three dollars so this is why I often say if you trade with me on the low end we have around a minimum of 250 let's just check that out 250 would allow us to get around five contracts give or take okay and so have just increased your win potential the money you would earn okay by just increasing the amount of contracts you were to buy okay so one contract look at this cost us fifty one dollars five contracts cost us 255 so if you come in with two hundred and fifty five dollars you can get five contracts for this and that just means the more the Mary and this is why I often say trading options and learning to trade and master the charts is one of the best side hustles that you can kind of come across because you can scale in a way you can't do anywhere else just by doing the same exact play but you just increase it from one contract to five you just triple quadruple your earning potential okay just that simple now if you trade like me and you do around 100 shares per play that's around fifty one hundred dollars okay and then as you guys get more experience is meaning when you master the charts I like to do 200 contracts every one of my option plays now I'm a sniper guys I'm probably one of the best in the game okay so I'm not recommending this but look at what I would be on the hook for around ten thousand dollars I would get in get out knock this play out the park and quickly make a quick two three four thousand dollars in a matter of 15 minutes okay that's how this is done that's all I'm doing the play is the same that's why you run the play we calling the Huddle let's go ahead and dive into the charts okay guys I'm teaching a lesson on the one hour chart here so that you guys can see some potential entries that you might want to consider okay so for the example I gave we were looking at the nine dollar strike or the nine and a half dollar strike price on a call option take your eyes to this level right here okay that level of support would also be a prime entry level okay support can also be a great opportunity for entry all right so if the stock was to pull back for example let's say it pulled back to this 888 level okay that would be a great area to enter your particular play all right and if you entered here this allows you to buy low as you see look at this is how this has been holding up as support this whole entire time not once had this candle came down and broke through this level so therefore you know you have a lot of support on your side so if we pull it back your logic could be okay I need to be patient I need to make sure that I'm looking for the right entry and how about that eight dollars and 90 Cent range okay boom you will get in here buy your car and then you will be looking to ride it back to the upside on any potential move okay towards that nine dollars nine fifteen nine thirty that's how you maximize your gains good options versus just buying right at Market open without trying to find a entry or buying and getting in on a pullback okay that makes the world of difference check this out guys if you come down here and this is around 8 23 now that's a massive drop I would probably teach you guys how to buy a put to take it down here but if you were able to get in on a pool back here look at how this has held up at support on all these levels okay so we know we have strong support at 8 23 not that it can't come below that but here would be an even better entry if you was to see this price presented so and then you can buy a car once at this level once it's done consolidating okay and then you would ride it back towards that nine dollar range which would be an even massive play probably double your money and options and that's how powerful this is and that's why we do this and that's why we talk about our next home run or hitting home runs because if you get in at 823 or 888 and you take this up two or three dollars guys you have doubled your money just like that in a play like this listen guys hopefully today's lesson was helpful hopefully you see the correlation of using the charts to help pair with your injuries alongside the options chain to kind of pick your expiration they picked how much time you want to give yourself to execute on these plays when done right when you put in the time and when you devise a trading plan guys the potential is endless and so I struck you guys each and every day to put in a work to keep showing up keep applying yourself and to make sure you do all you can to learn and master this skill because if you can learn how to fish then it allows you to teach others how to fish and no matter what's going on in the world guys you always have a skill that you can go to to help you generate some supplemental income you can help change your life you can help have it at a part-time job however you see fit because that's how powerful this is listen and I hope this was helpful but more importantly guys I want to see you all succeed I want to see you all take it all to the next level okay with that being said we make videos like this every day so if you like this one make sure you check out the next one remember most people see the end result very consider the journey do me a favor don't forget to like subscribe to the channel make sure you guys grab some free stuff use my link below and I'll catch you guys in the next one peace

Channel: Chris Sain

Views: 207,251

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Id: oqVB47T7EJU

Length: 13min 41sec (821 seconds)

Published: Sun Jul 16 2023