- Course Title
- Introduction to Stock Options
Learn how to evaluate, buy, sell, and profit with investment tools that were once thought to be only for the pros. This course will teach you how to protect your portfolio and profit in a down market, an up market, or even a flat market. Learn to leverage your investment dollars for potential profits that surpass those possible with stocks.
- Understand what stock options are and what risks and rewards they offer.
- Master basic terms and concepts related to option symbols and exchange-traded funds.
- Learn about option premiums: what they are, where to find them, and how to interpret each element in an option pricing chart.
- Discover what gives an option value.
- Understand how profit-loss graphs work and why they're useful.
- Discover how to buy long call options.
- Find out how to sell short call options.
- Discover how to set up a covered call option.
- Understand how and when to buy long put options.
- Learn what short put options are and how you can use them.
- Introduce three advanced option strategies: the bull spread, the bear spread, and the long straddle.
- Review the entire course, understand market sentiment, and consider how risk affects different investment strategies.
Wednesday - Lesson 01
Are stock options worth your time and effort? You’ll find out in this lesson. We’ll explore where options originated and whether they are as risky as many people say. Then we’ll go over the formal definition of an option, so you’ll understand exactly what you’re dealing with. Finally, we’ll look at some easy-to-understand examples to drive home each element of that definition.
Friday - Lesson 02
What does “GOOG120121C00680000” mean . . . and why should you care? Every investment specialty has its own jargon, and options are no exception. I’ll explain option symbols and other peculiarities in a way that’s easy to understand. By the end of this lesson, you’ll be able to identify any option just by looking at its symbol. We’ll also explore exchange-traded funds (ETFs), which offer exciting option investments you may eventually consider.
Wednesday - Lesson 03
One of the most important things to consider before you buy anything is its price. In this lesson, you’ll learn where to find option prices, what they look like, and how to interpret each element in an option pricing chart. You’ll become what I call a good option detective.
Friday - Lesson 04
It’s one thing to know an option’s price, but it’s quite another to know if that price is reasonable and fair. This lesson gets under the hood of option pricing so you understand what contributes to option value. Knowing what makes one option more expensive than another is one of the essentials of option pricing. When you finish this lesson, you’ll understand that some options are overpriced and some are under priced . . . and you’ll know which are which before you trade.
Wednesday - Lesson 05
This lesson introduces you to an easy graphing system that will show what kind of profit or loss may be possible when you trade any option. These graphs bring clarity to even a complex option strategy. Armed with this knowledge, you'll enter any option trade fully aware of potential risks and rewards. You’ll also know precisely where your break-even point is. All this information contributes to a fully informed trading experience.
Friday - Lesson 06
Get ready to learn about your first basic option strategy—the long call. When you finish this lesson, you'll know the best way to profit when you think a stock price is about to go up. You'll also understand which option to buy depending on how bullish you are about that price movement.
Wednesday - Lesson 07
This lesson will tell you where options come from and how you can, if you want, create them yourself. How? By selling a call option. This is called naked call writing, and it's one way you can use options to profit when you think a stock price is going to hold steady or drop. You'll learn the risk inherent in this strategy and what it means to be assigned.
Friday - Lesson 08
We'll explore covered calls in this lesson. This strategy involves selling call options on stock you already own. It's a popular way of making a profit even when your stock's price isn't going up. You'll learn the how, when, and why of this essentially conservative strategy in one easy lesson.
Wednesday - Lesson 09
Certain options profit when a stock drops. This lesson acquaints you with the put option, which is in many ways the mirror image of the call option. The versatility of the put option impresses many of my students.
Friday - Lesson 10
Few investors know the benefits—much less the in and outs—of selling put options, but this lesson will fully acquaint you with both. Known as writing naked puts, this strategy is also a way to buy stock for less. And there’s something to be said for collecting your profit up front and putting that money to use immediately!
Wednesday - Lesson 11
See the beauty of options as you learn about three combination strategies: the bull spread, the bear spread, and the long straddle. This taste of more advanced option strategies may whet your appetite for other, more esoteric combinations—and there are many. After this lesson, you'll have a good sense of how you can use option combo strategies to make profitable trades.
Friday - Lesson 12
This is the lesson that pulls together everything you've learned into one cohesive overview. You'll also learn about market sentiment and examine how it influences which option strategy is appropriate and when. Finally, we'll discuss the concept of risk and how it's an integral consideration for any option investment strategy.
Method of Instruction