Introduction to Call Options Trading Strategies for Beginners
Welcome to the world of Options and Options trading strategies for Beginners. The Call Option is the most basic of Options, and therefore the best to study first. Buying a Call Option is just like buying a stock – you expect the price to go up, and sell it for a profit. But what exactly is an Option, and how is it different from a stock. Most newcomers to Options have difficulty in understanding Options because training material jumps right into Options jargon. In this course on Option trading strategies for Beginners, we’ll study the Call Option in detail. This course uses a real-world example in real estate to explain how a Call Option can be constructed for a situation. We also introduce what an At-The-Money, Out-of-the-Money and In-The-Money Option is, using our real estate example. Finally, everything is demonstrated on a Live trading platform with a good example of Option trading strategies for Beginners.
No Jargon Option Strategies for Beginners
Why are Options called “Options” and why do they trade in many dimensions. What is a derivative, an underlying asset and an Option. And why is this background particularly important to understand Option strategies for Beginners.
Option Pricing factors
Strike price, Time to expiry, and Moneyness of an Option in simple terms. At-the-money (ATM), Out-of-the-Money(OTM) and In-the-Money (ITM) Options. There are many parameters that go into Options pricing and these are key aspects to understanding Options trading strategies for beginners.
What are Call Options
A Call option is the Right to buy an asset. But this definition is insufficient to understand these option strategies for beginners. We take a great Real estate example to understand a Call Option and what the different elements of a Call Option are.
Options Risk and Reward
Sharing of risk and reward between buyer and seller of Options. Profit and Loss profile of a Call Option buyer and Seller. Buyers and Sellers of Options play asymmetrical roles, the risk and reward are not the same.
Rights and Obligations for buyers and sellers. What parameters impact a Call Option price. Live demonstration of a Call option on a trading platform using AAPL Options. Buying a Call option is the best option trading strategy for beginners to understand.
Explained in simple layman terms, newcomers will have no difficulty understanding what Options are in theory and in practice. Even though these are Option strategies for Beginners, it is critical to learn these concepts in simple terms.
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