Options Boot Camp

Basic Training: A Review of How to Protect Your Profits Easiest method: Buy a 2-3 month put ATM or slightly an OTM put. Protect just those gains. What do you do if you have a broad portfolio? Hedging Rule of Thumb. Expect to spend about 2% of your portfolio for effective 3-6 month protection. How do you reduce the cost of protection? Buy a spread instead of an outright put, set up a collar, or set...

In this episode, Mark, Dan Passarelli and Jill Malandrino take on listener questions. Options Drills: Today's topic was inspired by this listener question: Question from MarkLitwin: How do you lose money in options in the most effective way? Don't by ATM straddles Don't load up on far OTM options because they're cheap Don't trade earnings Be careful with trading weeklies Watch out when selling opt...

Mark, Dan, and Jill were all in the Options Insider studio to record this session. Education, and hilarity, ensued. Options Drills: What are options trading ideas that an active stock trader can use in their portfolio? Getting paid to take on risk, cash-secured put The wheel trade Stock replacement strategy; what about using LEAPS? Using a diagonal spread to generate income Mail Call: Fall in for...

Mail Call: Fall in while your drill instructors answer your questions. Comment from Andrew McNichol - Big fan of your podcast. I appreciate how you start at square one and then walk listeners through every element of options and options trading. Thanks. Question from Tim D. - How high do rates need to be before I need to worry about rho? Question from Kraken1975 - Which of the Greeks do you utiliz...

Your hosts for this episode are: Mark Longo, Founder, Options Insider Media Group Andrew Giovinazzi, Chief Education Officer, Option Pit Jill Malandrino, Global Markets Reporter, Nasdaq Introduction Segment: What are Nasdaq's options education initiatives? Why are options and options education so important to Nasdaq going forward? Creating content for RIAs. Options 101: Going back to the Basics Ba...

Options Drills: What is a calendar? How do we set them up for earnings? Strike/Month selection? Should we carry them through the event? When do we take off? Calendars vs. Diagonals? Mail Call: Fall in recruits and get your questions asked. With $VIX giving up the ghost - which products are you hoping will provide new sources of #Volatility for your #options trading? 33% - Crude Oil (WTI, etc) 20%...

Basic Training: Delta Revisited A basic overview of Delta What is it? How does it impact your trading? Inspired by a Market Trader Mentoring newsletter article Delta Can Still be Your Friend Mail Call/Options Options Question of the week With $TSLA threatening $315 how are you leaning in your Options trades this month? Would you rather: 18% - Buy 1-month $300 put 25% - Buy 1-month $330 call 25% -...

Basic Training: Today we are going into the depths of option settlement. A question that is often asked in Group Coaching is that of the various settlement issues. Many option traders limit their universe of option trading to two broad categories: One group consists of individual equities and the similar group of exchange traded funds (ETFs). The other group is composed of a multitude of broad bas...

Options 101: Our topic today was inspired by a listener question. Question from Mark Davis: Hello, I am a new listener to options bootcamp and am currently on Ep. 4. There was a mention of using covered calls to generate a "dividend." I am having trouble tracking down more information on this. Being still new to all of this I am hoping to get a clearer picture of how it works. How far out on expir...

Basic Training: Short Puts Revisited Want a complete overview of selling puts? Check out Options Boot Camp episode 4 from May 7, 2012. New study: "An Analysis of Index Option Writing with Monthly and Weekly Rollover," written by Oleg Bondarenko, professor of finance at the University of Illinois at Chicago, and sponsored by CBOE. It is.the first comprehensive study to examine strategy benchmark wi...

Options Questions of the Week: How do you prefer to trade options? 19% - Long premium 15% - Short premium 56% - I avoid earnings 10% - Other, explain below How many U.S. options exchanges do we need? 5% - 14 is perfect! 29% - The more the merrier 62% - Make it stop! 4% - Other, explain below Should options trade after hours? 53% - Heck Yes! 15% - Only in Major Names 15% - No, poor liquify 17% - No...

Basic Training: Theta. A review of Theta and its impact on income trading. New Study: An analysis of index option writing with monthly and weekly rollover - First comprehensive study to examine strategy benchmark with traditional stock, bond indexes incorporating weeklys options. Mail Call: Listener questions and comments. Question from KDDiddy - I want to protect a stock position with puts at a s...

Basic Trading: Second Order Greeks Question from Brian F. - My question is for Dan. I listened to the Boot Camp shows, and recently had a question about gamma. Imagine my surprise when I learned there are other secondary greeks and even tertiary greeks. What this? Are you holding some greeks up your sleeve Mr. Black hat? So my question is what are these greeks, but more importantly, who uses them...

Options 101: Today we are joined by Dan Cook from Nadex. He walks us through the following: What is a binary option? How does the pricing work vs. standard options pricing? How do the ticks work? Is there a multiplier? Does the price represent the pure probability of an option expiring in-the-money? How does expiration work? What about the final minutes around expiration? What is the farthest out...

Mail Call: The drill instructors will take your questions now. Question from TennisGr8t - Can you give examples of managing positions using Greeks and is it a good strategy? Your show is awesome. Question from Pedro Indio - Discovered podcast within the last week and I am up to episode 8. I understand how overall market and industry direction might influence a stock direction. Is there something s...

Options Bootcamp 56: Options Trade Tags Demystified Basic Training: Today's guest is Andrew Giovinazzi, of Option Pit, Option Block, and Options Oddities fame. Mark, Dan and Andrew discuss options trade tags, including: Regular Spread Block Trade Inter-market Sweep Combo Cancel SoldLast Price Variation Buy Write Mail Call: Listener questions and comments Question from Vegan - What oil products do...

Options Bootcamp 55: Going Naked in IRAs Basic Training: Using Options in an IRA Account. Can you trade options in a retirement account? What are the limitations? What strategies can you utilize? What are the benefits of writing covered straddle vs calls? What is a stock replacement strategy? When should someone consider this strategy? Using options as an investment tool. What are any other invest...

Mail Call: Listener questions and comments Comment from Max_p24 - One of the best podcast for option trading. They have amazing Bootcamp for option beginners. Question from Brian Collamer - Back in October I sent this question and I see you ran with it in a couple of other shows: "You mentioned that when selling options the fastest theta decay occurs in the 45-30 day range. I thought that was only...

Options 101: Income Trade Adjustments An overview of income trades: Covered call, short put, short straddle, etc. What do we mean by adjustments? When to or not to adjust? Previous episodes that will be helpful: Options Bootcamp 41: Advanced Adjustments & Options Bootcamp 40: Trade Adjustments. Basic adjustments, partial adjustments and adjusting into spreads. Mail Call: Listener questions and com...

Basic Training: 2014 Year-in-Review/2015 Preview What option strategies worked in 2014: put credit spreads, IV overpriced throughout the year, "Wheel of fun." Things to learn from 2014 - Do not get married to a single strategy. Misperceptions of 2014 - VOL/VIX was cheap. Despite "low volatility" options volume was still very strong in 2014. Tempting to believe that OTM call buyer did well in this...

Basic Training: Futures Options vs. Equity Options We've talked about how to use options to mitigate your portfolio risk, but many traders also rely on commodities diversification as a way to mitigate portfolio risk. Futures options strategies: All of the options strategies we've discussed on this program in the past are applicable to futures options as well with a few exceptions Covered call & pr...

Mail Call: This episode is dedicated to our listeners. Question from Neil Filasco - What sets do you recommend to hedge my retirement accounts, in clouding my defined contribution plans? The pickings in these accounts are relatively slim and there are no options to speak of. As one of the newly enlightened options masses, I thank you for bringing me into the fold. Question from Chandra Bajpai - He...

Basic Training: Covered Strangles/Covered Combo What is it? Long stock, covered call, short put. Why do it? Collect more income than a standard covered call or short put. Why not to do it? Increased margin requirement, you will increase your stock position to the downside. Example: XYZ trading at $50. Option 1 - Sell covered front month 55 strike call for $1 - collect 2% income. Option 2 - Sell bo...

Mail Call: Your questions directed this episode. Question from Jason Kruse: Is there a Bootcamp episode that discusses OI and how it can affect expiration moves? I hear people talk about max pain and pinning like it's a conspiracy. Would love to hear real info about how it works. Open Interest What is it? Why is it important? Why is it not important? Pin Risk What is it? How prevalent is it? When...

Basic Training: How to protect your profits. Easiest method: 1st buy a 2-3- month put ATM or slightly OTM put. Purchase an ATM put spread with the short leg at your break-even point. Easiest to do in a single stock or underlying. What to do if you have a broad equity portfolio? Its a little more complicated. Determine the effective beta of your portfolio an how many effective shares of that index...