Options Boot Camp

Options Bootcamp 27: Calendar Spreads, the Sequel Mail Call: So many questions, so many answers. Question from Alpha_Dog - Let's say I buy the Ford August Week 1 17 call, and then sell the July Week 4 17 call for a $.07 debit. How does that position make money? I don't get it. Don't both calls make/lose money as the stock goes up and down? Question from Nevin Pierce - What is more important when trading time spreads - gamma or vega? Is vega the source of profit and gamma the source of risk, or vise-versa? How do I profit of vega without a corresponding large move that ends up costing me more with the gamma? Please help options drill instructors! I'm in over my head! Question from Tim Nettles - I am confused about time spreads. I don't really get how they work and how I'm supposed to view them. For example, in the XYZ July/Aug 50 call example cited my Mark Longo - what do I do after the July leg expires? Should I consider that or should I close out the whole position prior to July expiration? What if I was u

Options Bootcamp 26: Calendar Spreads Basic Training: Calendar Spreads This builds on the knowledge from episode 13 "Basic Spreads" and episode 14 "Advanced Spreads" from December. What is a calendar spread? Why would you want to use a calendar? Calendars are much more complex that basic textbooks tell you. The delicate balance between gamma and volatility in a calendar trade. Can't use P&L diagrams How do you manage a calendar?

Options Bootcamp 25: Using Options in Retirement Accounts Basic Training: What can and can't you do with options in a retirement account. Retirements accounts do not let you use margin. Stick to the covered calls. Mail Call: Listener questions are filling up our inboxes Question from Aman16 - Where does the "Iron" part of Iron Fly and Condor originate from? Question from Tim Phillips, Boston, MA - What is your referred way to express a near-term bullish outlook on a stock? Write an ATM or near ATM put or use a stock replacement strategy (deep ITM call)? Question from T_BO - When should I use a stock replacement strategy vs. call or call vertical? Question from Anaz9 - If I buy 1 ATM, sell 2 OTM calls in a ratio spread, how is the margin calculated on the naked portion? Is it the same as selling naked OTM?

Basic Training: Alternative Income Strategies: Writing covered straddles vs. covered calls. What are the benefits of writing covered straddle vs. calls? What are the drawbacks? Remember your synthetics: Covered straddle = short two puts. Some additional pros and cons of this strategy. Mail Call: Listeners Take the Mic Comment from Ronald Yuravich: I heard your podcast of the Option Boot Camp episode talking about straddles. I don't like straddles because I would have a gain on one side, but it didn't cover the loss on the other side. I prefer strangles better, but only when vol is high, like in 2008. On September 15 I placed a trade on XOM after I got home from work that would be placed for the opening of the next day. I bought 3 JAN 09 90.00 strike calls and I bought 2 JAN 09 45.00 strike puts. XOM was trading around 65.00 a share at that time. The next morning when the markets had opened, I checked to see if my trades were placed, and they were. I was watching Bloomberg around 11:00 AM and saw that XOM was

Basic Training: Getting to know the fundamentals What is a Straddle? Why would you want to use it? Straddle pros and cons. Iron Butterflies and Iron Condors are straddles and strangles with protection. Gamma scalping is the only way to really make long straddles profitable over the long run. Exiting straddle positions is difficult to do effectively. Using straddles pre-earnings Scammers love to pitch straddles, saying "Make money in any market condition." Be careful. Mail Call: Even bootcampers get mail privileges. Question from Alan Utchins, Baltimore, MD - I read with great interest the recent article about options trading in the New York Times. The article seemed to contradict everything you've discussed on this fine program. They highlighted several studies that they claimed prove that most options traders lose money. What is your response to this? Is this essentially a hit piece on the options market or does this author have some valid points? Question from Optrader - What books would you recommend

Options Bootcamp: Exit Strategy Basic Training: Why is it so important to have an exit strategy? What are the rules of thumb when closing out positions? Should you be more aggressive when closing out long or short positions? What are the rules of thumb regarding when to roll you positions vs. closing? Mail Call: Boot campers have so many questions. Question from Teddy Z: Mark - Love the show! I've listened to every episode. I think I'm getting a handle of this stuff now. Just wanted to ask - What do you guys think about ETF options? Are there any you prefer over others? Perhaps that's a good topic for a future show. Question from Alexander Gustaffson, Stockholm, Sweden: Guys, just want to let you know that you have a big following in Sweden. Maybe you should plan a live show in Stockholm one of these days? My question regards single stock futures. They are very popular in Europe but don't appear to have caught on very much in the U.S. I wonder why that is? Can you discuss the hedging of option positions with

Options Bootcamp 21: Playing Defense Basic Training: Playing defense with options: it’s very important right now! Basic Defense: Protective Puts (full overview in Ep. 3) How do you hedge your position with protective puts? Intermediate Defense: Put Spreads and Ratio Put Spreads. Covered Calls - (full overview in Ep. 4) How do you generate income with a modest hedging impact? The Power of the Collar: combining the put and the call into a beast of an option. This is the favorite defensive strategy of most financial advisors who use options. The pros/cons of repeatedly doing zero cost collars. Volatility Defense: VIX Options/Futures. The myth of VIX's perfect inverse correlation- there are problems with relying on volatility as your only hedge, i.e. black swans, days when VIX outperforms, etc. The pros/cons of direct defense vs. indirect defense. Mail Call: Hey recruits, what do you want to know? Question from Tina K. - When (if) should I consider volatility products as a hedge? Question from Mr_Zen - Can yo

Basic Training: We present two choices for using options in lieu of stock: Stock Replacement Strategy. How does it work? Examples include: An ITM leaps call purchase - requires premium over parity payment Selling a one month ITM put - for the more options savvy trader. By swapping out a LEAPS for an underlying, you get a much more preferable position from a Greeks perspective. Stock Repair Strategy Under the right set of circumstances, it can be very useful and practical. Appropriate for stocks that fall in value of 20-30%, that you feel within a few month can recoup half of it losses. How does it work? Mail Call: Bootcampers get their questions answered. Question from M Higgins: My financial advisor is not a big fan of options. He keeps trying to steer me into annuities and life insurance policies instead. What do you guys of those products as investment vehicle instead of using options? Question from Mr. Anonymous: I've heard a number of options traders, including hosts on this network, use the term "leg

Basic Training: The topic this week is margin What is margin? If I have leverage in my options, why do I need margin? Is it possible to not qualify for margin? Why do you need a cash account? What can/cannot you do with a cash account? What are some of the most common risks, mistakes or problems customers run into when implementing margin in their account? What are the benefits of portfolio margin over other, different types of margin? Mail Call: Let our drill instructors answer your questions. Question from Jason Cruz, heyojayo: Would Bootcamp be able to detail the pros and cons of buying two 50 delta calls vs. one 100 delta call, or point me to an episode if there is one already? Question from Tad Briggs: What does the term "risk reversal" mean? What risk am I reversing? How should I use this strategy in my training?

Options Bootcamp 18: The Joys of Synthetics Basic Training: Today's topic is Synthetics What is put/call parity? Example of put/call parity. What does it mean for your options trading? What are synthetics? What is a married put? Why knowledge of synthetics is important for successful options trading. Mail Call: Fall in for listener questions. Question from EonJ: Does portfolio margin matter if I am just trading long verticals and ratio spreads? Question from Phil S., Santa Fe, NM: I attended an options seminar recently where they promoted the selling of credit spreads in Apple and Google. I'm still somewhat unclear on the concept however. What exactly is a credit spread and how does it differ from other spreads like straddles, call spreads, etc.? Thank you for your time. I just discovered your program and I'm looking forward to listening to your earlier episodes. Question from Ephram J.: I'm a CFP and I'm starting to add options to my asset mix. Does Sogotrade offer a platform and/or specialized tools for

Options 101: The quintessential options debate -- buy options or sell them? Many options professionals lean toward "when in doubt palms out." Simplify the options universe into two segments of risk: directional risk and volatility risk. The use of delta and other Greeks when deciding or analyzing when to buy or sell options. Short premium pros and cons Long premium pros and cons Mail Call: Recruits are asking a lot of questions. Question from Tim Nagerty:Mark and the other drill instructors have repeatedly stressed portfolio margin on this program, but I'm somewhat confused by this concept. Can the hosts explain the benefits of PM for an options trader? I have about $70k in my trading account right now. Is it worth it for me to transfer in the extra $30k to me the $100k limit to qualify for PM? Lastly, does SogoTrade/Wang Investments offer PM for its customers? Thanks, love the show! Question from Allison S., Spokane, WA: I thank you all for this wonderful program. Do you have any plans to take Options Boo

Options Drills: How to play earnings through options plays. There are two basic approaches to earnings trading: long premium and short premium. Long Premium - PROS: Advantageous because you essentially receive free or dramatically reduced gamma with little decay in the weeks leading up to earnings. CONS: All of that decay comes out, and more, after the announcement. Also, much of the movement in the underlying occurs after-hours and is unavailable to options traders. Short Premium - PROS: Higher probability of success, need a substantial move post-earnings to lose money. CONS: Doesn't collect decay until earnings event, potentially losses can be catastrophic can make it hard to sleep at night. How to analyze Greeks during earnings week. Different strategies to employ during earnings: Calendars, Straddles, Strangles & Butterflies Mail Call: Our drill Sergeants show their softer side. Question from Stock Doctor: Why can't I trade options after hours? I'm missing most of the stock movement if I wait until

Basic Training: Exercise, Assignment, and Settlement. There are two styles of options you will encounter -- American and European style. What's the process when your exercises and assignments are determined? When do those contracts settle? How do I determine if my options are going to be exercised or assigned against me? What is pin risk? What is a dividend trade? Mail Bag: Even options recruits get mail privileges. Send those letters in. Email question from Alan P - Michigan: You guys have talked about the difficulties of executing multi-leg spreads in the past. What should I, as a retail options trader, be aware of when executing my spreads to guarantee better execution? Tweet from Riley: Are there any plans to speed up exercise and settlement in the options market? Facebook question from Dan Thomas: Isn't it a good thing for my call that aren't in the money to be exercised against me? Doesn't that mean that I'm locking in a profit by buying or selling stock at a more favorable price then where it's curren

Basic Training: Spreads with wings. What is a butterfly? Iron butterfly? What is a condor? Iron condor? Mail Call: Even bootcampers get mail privileges Email from Alan Rick: What makes a spread "iron?" What is the difference between an iron butterfly and a regular butterfly, iron condor, etc. Thanks and please keep up the show; I'm learning a ton! Email from Alan Charter: If I think a stock's volatility is elevated going into earnings, should I write an iron condor or an iron butterfly? Which is the better trade? Tweet from Mr. Dockerson: AAPL! AAPL! AAPL! What are your favorite Apple spreads right now?

Basic Training: A quick review of spreads. What are spreads? Why should we use spreads? How do the Greeks work with spreads? How do you calculate, performance, etc? Why do I want to net reduce my delta and exposure in these elements? What are some of the downsides to spreads? Options Drills: Vertical Spreads Verticals - What are they? Long verticals vs. Short verticals. Credit spreads vs. debit spreads. You'll experience the maximum profit when the underlying moves to or sits at the short strike of that spread. What are collared spreads? Mail Call: It's your turn to pick on the drill instructors. TWEET FROM PHIL S: What's the deal with options spreads? Why can't my orders get filled? How do we fix this problem? JOHN'S CUSTOMER QUESTION: How do I know if a spread is worth doing or has some "trade" value?

Options Bootcamp 12: Weekly Options Basic Training: What are weekly options? How do the Greeks differ in the weeklies? How are the weeklies traded? Option Drills: Selling strategies for weekly options. Diagonal and vertical spreads, straddles, ratios, etc. What are some strategies for selling weeklies around earnings? Mail Call: Taking on your questions. Tweet from @JJacks: Does Sogo trade offer weekly options? What approval level do I need to trade them? Email from Theodore in Houston, TX: How long does it really take to learn options and become a good options trader? Email from Alex S. in Tusla, OK: My financial advisor doesn't know anything about options and doesn't seem inclined to learn. Should I fire him? If so, where do I find an advisor who uses options?

Basic Training: Busting Options Myths: 1) Market makers know where the stops are, therefore market makers who take the other side of trades are taking advantage of retail customers. 2) The only way to trade profitably is to be a dark side short premium seller. Plus, credit spreads are better than debit spreads. 3) I only need to be good at one trading strategy. 4) Option trades and spreads in particular are difficult to execute and should only be handled by professionals with years of experience. 5) Options are too risky for the retail customers. Mail Call: Our drill instructors answer your questions. Email From Alan Donson: Your format is excellent. Please add more pure options trade/content and feature John Critchley. Your intense focus on real options information with a view to options profits, not tedious theory is highly appreciated. TWEET FROM @ReallyG: You suggested put buy as an ASET to limit buy order? Certainly not in the gap below strike scenario your guests were discussing.

Options Bootcamp 10: Common Trading MistakesBasic Training: Your COs cover the most common options trading mistakes: Writing long-term options for income. Using market orders in illiquid options. Not closing options offered at a nickel. Buying worthless OTM "lottery ticket" options. Selling when implied volatility is high buying when it's low. Over-adjusting income trades. Believing that sell stops are better than wasting premium on buying downside puts for protection. Mail Call: Answering your options questions Via email from John S. - Which is the better method of portfolio protection, a put option or a stop order?Via email from Phil K. - I’m very interested in weekly options. They appear to be a very popular product right now. Can you do a show about weekly options for those of us who are thinking about diving into these products? Perhaps common mistakes, misconceptions, myths, errors, etc. Thanks a million. I just discovered the show and I've already learned a ton. Tell John I'm on the SogoTrade site ri

Basic Training: We're going to bust many of the myth and misconceptions the permeate through the options market, particularly to those new to retail options. Somewhere between 75-80% (or even more) of options expire worthless every month, therefore you should be an options buyer. Selling options is a risk-less, or near risk-less, endeavor. All out of the money options have higher volatility than at the money or in the money options. Calls go lower, stock goes higher - How could this possible be? Mail Call: Listener questions and comments Tweet from @UncleJessie - I love Bootcamp, it's transformed me into an options trader. I'm also new to Sogo trade, can John explain why his platform is the best for options traders - commissions aside. Facebook question from Tim Stevens - As a new options trader, should I focus my efforts on maximizing delta or theta? I primarily buy calls/verticals. Tweet from @Eddie66 - Hey drill instructors, I love the Bootcamp! I'm looking to hedge my portfolio - Spy puts or VIX calls?

Options Bootcamp 8: It's All Greek to Me Basic Training: Time to revisit the Greeks: Delta - The chief Greek Gamma - The rate of change of Delta, as the underlying stock changes, but sometimes overwhelming to beginners. Theta - Time decay. The rate of change of an option given a change in the time to expiration. Vega - The king of the Greeks. The rate of change of an option price, as a result of change in implied volatility. What is the difference between a retail and professional options trader? Mail Call: Reaching out for a bootcamp lifeline. Tweet from Tex05: Mark, why do you always say that retail options traders trade Delta and professionals trade Vega? Email question from Evan - Atlanta, GA: Can you guys explain the importance of dividends to an options trader? That seems particularly important given the recent snafu over SPY dividends. Why are dividends important to options traders and how should it affect my options trading? Facebook question from Mike Debrasse: I'm hearing a lot about this being a