Quick Options Breakdown

1.Earliest expiry OuttheMoney: Biggest Payout Biggest Risk

2.Earliest expiry IntheMoney:
Big Payout Medium Risk

3. Further expiry OuttheMoney:
Lower Payout Lower Risk

4. Further expiry IntheMoney:
Lowest Payout Lowest Risk

Swings: Buy low IV ✅

How to avoid blowing up your account trading OPTIONS
(A thread)

1. Becoming consistently profitable trading OPTIONS takes practice and discipline.

2. Trading Options is similar to trading stock, YOU are in control of your profits per movement (up or down) in the underlying.

3. Buying a CALL- You pay a Premium price based on the STRIKE price you choose. With a call you get paid when the stock moves up

4. Buying a PUT- You pay a premium price based on the STRIKE price you chose. With PUTS you get paid when the underlying stock price goes down

5. Premium price goes up when the trade moves in your favor (call betting upside, put betting downside movement)
6. The goal is to buy a premium and resell it for a higher premium when the trade works
7. Like basic stock trading, you want to scale in and out of your position

9. People see cheap premium and tend to pick those, not knowing in reality they are risking more!
10. Don’t let the premium price dictate which strike you chose.. the higher the premium, the less risk/ volatility that trade will see!

11. When day trading options, you are essentially trading DELTA
12. Delta is what your premium will pay per dollar movement in underlying.
Ex. Delta .5 pays 50c per dollar movement in underlying
So if original cost =50$ premium,
1$ move up in underlying pays .50 or 100% trade