Options Trading for Beginners (The ULTIMATE In-Depth Guide)

Options trading is a very difficult thing to learn as a beginner, as there are many moving parts and many concepts to learn simultaneously. In this video, my goal is to bring you from zero to hero in a few hours, even if you don't know anything about trading options.

We are going to explore the world of options through many examples and graphical illustrations, and explanations simplified as much as possible. My goal for this video is to provide you with an overview of the biggest options trading ideas and get you to a point where you understand the concepts intuitively and not just things you've memorized.

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In this video, we will advance through the following sections:

0:00 - Introduction
0:50 - Basic Option Characteristics (Expiration, Strike Price, Contract Multiplier)
3:31 - Call Option Introduction
4:47 - Basic Call Option Example (With a House)
10:13 - TSLA Call Option Example
15:43 - Do You Have to Exercise an Option to Make a Profit?
23:42 - What We've Learned About Call Options
27:19 - Losing Money Buying Calls
27:52 - ADBE Call Option Example
31:57 - Put Option Introduction
33:35 - IWM Put Option Example
40:47 - Losing Money Buying Puts
42:00 - NVDA Put Option Example
45:35 - Buying Puts vs. Shorting Stock
48:47 - Option Price Components (Intrinsic & Extrinsic Value)
53:27 - Extrinsic/Time Value Explained
58:50 - Extrinsic Value Comparison Using AAPL Options
1:05:21 - In-the-Money (ITM), Out-of-the-Money (OTM), At-the-Money (ATM)
1:07:13 - Introduction to Shorting Options
1:09:06 - IWM Short Call Option Example
1:14:00 - NFLX Short Call Example (Big Loss)
1:18:26 - Short Call Breakeven Price Explanation + Illustration
1:21:12 - Shorting Put Options Introduction
1:22:15 - ATVI Short Put Example
1:28:00 - Thoughts on Holding Short Options Through Expiration
1:30:12 - Implied Volatility Introduction
1:41:54 - Visualizing a Change in Implied Volatility
1:49:20 - More on Exercise & Assignment
1:53:04 - Expiration and Automatic Exercise/Assignment
1:54:44 - Why Options Are Rarely Exercised Before Expiration (Quick Example)
1:58:02 - Which Options to Trade? Consider Liquidity (Volume/Open Interest)
1:59:35 - Example Stocks/Products With Great Option Markets
2:01:49 - tastyworks (now tastytrade) Offer - Get a Free projectoption Course
2:02:45 - tastyworks (now tastytrade) Trading Platform Demonstration (Buying & Shorting Calls/Puts, Analyzing Volume/Open Interest, Trade Execution Best Practices, Bid/Ask Spread, Using Limit Orders)

I really hope you enjoyed this video and learned a ton. I put a lot of effort into this video and my goal is to clear up a lot of the confusion around options trading, particularly for beginner traders.

It's not a perfect video, and we didn't talk about everything, but we walked through the biggest options trading ideas. For additional information, please check out the videos linked below!

Feel free to leave a comment if you have any questions, or just want to say hello.

=== RECOMMENDED VIDEOS/RESOURCES ===

#optionstrading

[projectfinance]

There are tons more examples and better visualizations than this 2020 version. Check it out and let me know what you think if you want more beginner-level options trading content!

I didn't wake up one day and say "I need a 2 hour, 53 minute video on my channel." But that's what happened when it was all said and done. I have made two "options for beginners" videos over the past few years, but both of them missed the mark for many (and myself when I rewatch them). While a lot of people learned from them, there were many left more confused, as I spoke really fast and used obnoxious animations, and didn't use concrete examples to enforce concepts.

My goal with this video was to take all of that feedback and create a video that was truly helpful for beginners, and who are serious about sitting down to learn. I really hope all of the explanations, examples, and graphical illustrations in this video help you finally understand some of the most confusing parts of options trading. And, I hope the brokerage platform demonstration at the end showed you how actually entering/exiting trades works.

We didn't cover everything in this video, but I believe this video can help build a great foundation for the rest of your learnings in the options world. As always, feel free to leave me a comment if you have questions, and be sure to download the PDF counterpart of this video for studying!

-Chris

[AlejandroDiego-gm]

As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?

[prettybrwneyez]

Three years later and I still say this is the BEST options video on YouTube

[Pambegay]

This time last year I considered getting into options without much knowledge and decided to have a consultation with a fiduciary, and it was incredibly insightful. One year down in, I truly cannot stress enough how helpful experts in this field are! Good video brother!

[xavierrosario]

It's insane that all this was free. Honestly so appreciative you took the time to teach so many people. Thank you sir🙏

[RutavegaLLC]

This man willingly lost ~50 bucks just to help teach us about options trading. Give him a round of applause!

[avo]

fake entrepreneur gurus would sell this for 2k and call it the best course out there.

[hectorguitar]

This video is incredible. Super clear and thorough. As a beginner, I’ll probably have to watch this several times to fully grasp all of the concepts, but I couldn’t imagine having to learn all of these basics without this video. Thank you and bravo!

[reactivebros]

No rambling, No bs, all knowledge. How is this even free dude? I love it!
Will let yall know how well my experience with Options will be!
Thank you projectfianance.

[RodolfoAPozo]

The fact that you invest that amount of time developing this high-quality content for free is admirable! Way to go. Congratulations!

[DelHorta]

Very rare to find someone who doesn't want to get paid to explain some basics. You won One more subscriber. THANK YOU

[philipblack]

As a person who has traded stocks for 15 yrs. and totally new to options all I can say is excellent, excellent, excellent!!!

[derek]

My wife's boyfriend recommended this video to me, and I have to say it was extremely helpfull

[sixdsix]

The amount of scammers in the comment section pedaling fake brokers and promoting forex and bit coin trading is absolutely nauseating. On almost every stock market and trading video without fail.
Thanks for the video, projectoption

[coachmeluca]

I have purchased a course and I have to say that many things that lacked there, this man explained for free! - It's very clear and easy to understand chris, good job! I am happy I found your channel

[velissalewis]

This was explained so well. I sent this video to several people this morning. You are a great teacher. Many people know the information but can not explain it so simplified.

[captain]

You're an absolute saint for putting something like this together for us to view for free. Cheers lad.

[fredgallag]

Seeking instant result is not the way to go in the financial market and that is why most people FUD at every slight DIP or MANIPULATION by the these people, I am of the opinion have a long term goal of 1-2 years, don't be a weak hand and you will be satisfied with the result.

[maximus]

The best Options course on youtube so far, thank you for this huge effort Chris.

[lgqhycf]

You don't need any other videos for option trading. This is one of the best and complete video to start and end with.