Finance

5 Options Trading Strategies for Beginners [Higher Return, Lower Risk]

5-options-trading-strategies-for-beginners-higher-return-lower-risk



Everything you need to know to trade options and five options strategies that will lower your risk and make more money. You will definitely want to bookmark this video for reference.

Options can seem too complicated for beginners. I know it was one of my least favorite subjects while studying for the Chartered Financial Analyst (CFA) designation. These stock derivatives can be your best strategies though for lowering risk on stocks and making more money. For example, on one option trade, I was able to make over $18,000 on SPY put options that helped offset the stock market crash in March.

And these options trading strategies really aren’t that difficult to understand once you get the basics down. There are only two types of options, calls and puts. Once you understand the basics, you can mix and match them to do anything and become a professional investor.

I’m making this video an all-in-one guide to options investing. We’ll start with everything you need to understand options basics, an options trading for beginners course that will set you up for those strategies. I’ll cover lots of options examples using Apple and Tesla to make it all easily understandable.

I’ll then show you how to invest in options and different scenarios when options trading is better than stocks. Finally, I’ll reveal the five options trading strategies I use to reduce risk and make higher returns.

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I’ll leave a clickable index below if you want to jump around but please watch the whole video. You need to understand the options trading basics if you’re going to use the trading strategies to their full potential.

This is an extremely long video. Give yourself some time, book mark the video and watch it a couple of times to make sure you fully understand each strategy. I guarantee, spend the time you need to learn this options trading tutorial and it will be a tool you use constantly to make better investing decisions.

0:00 Options Trading for Beginners
2:38 What are Options? Options are called derivatives because they derive their price from another investment, in this case from the price of a stock.
3:00 Apple Options Example
5:10 What are Call Options? Call options give you the right to buy shares of stock at a certain price (strike price) on a certain day. For this right, you pay a premium to buy the call option.
7:00 What are Put Options? Put options give you the right to sell shares of stock at a certain price on a certain day.
7:54 Why Do Investors Use Options? Options can help you make leveraged returns, reduce risk in an investment and profit from direction of a stock price either higher or lower.
8:47 Options Trading Basics
9:00 Options Trading Definitions: Expiration, Strike Price, In-the-Money, Out-of-the-Money
Options Trading Strategies
15:00 What are Call Options?
15:40 Pros and Cons of Call Options Trading
16:38 What are Put Options?
17:40 What is a Cash-Secured Put Option Strategy?
21:00 Covered Calls – involve buying shares of the stock and selling call options to offset a near-term loss of price.
30:50 Protective Puts – involve buying shares of stock and buying put options to protect completely from a downside in the shares.
35:45 Option Spreads – involve buying or selling puts and calls for the same month and are a great way to profit from the direction of stock prices while cutting the cost of buying options.
42:45 Option Straddles – involves buying both the call and put options and give you the opportunity to profit from a large move in shares of a stock.
46:35 Option Collars – involve the protective put options trading strategy along with the covered call at the same time to reduce the overall cost.
50:05 How to Trade Options

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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.

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Robert Dunfee

24 Comments

  1. Let's Talk Money! with Joseph Hogue, CFA
    July 20, 2021 at 11:10 pm

    I'll be covering three of my favorite options strategies for 2021 in Sunday's livestream @2pm EST…Don't miss it! 💰 Check out these 10 Financial Ratios EVERY investor must know! https://youtu.be/hiRjnyQyHj4

  2. prathapan
    July 20, 2021 at 11:10 pm

    This was great, I have been researching "safe options trading" for a while now, and I think this has helped. Ever heard of – Winoorfa Option Olegroson – (Have a quick look on google cant remember the place now ) ? Ive heard some pretty good things about it and my neighbour got cool success with it.

  3. OG Reggie B
    July 20, 2021 at 11:10 pm

    Oh Yeah! the SPCE stock is primed and ready for the 0.50/0.50 delta setup entry.

    Remember it's very important to buy your options with a minimum of thirty days expiration and always close or roll your position at least one week before expiration to keep from becoming a victim of the Theta killer i.e time expiration.

    Peace ✌ OG-RB

  4. Papo Nuny
    July 20, 2021 at 11:10 pm

    Love how you break down step by step for us apes thanks Jo

  5. Edwin S Gosal
    July 20, 2021 at 11:10 pm

    I like to use Vertical Credit Spread for SPX ..!

  6. Julesp R
    July 20, 2021 at 11:10 pm

    Make more money! Protect/hedge my capital

  7. ALL Xs
    July 20, 2021 at 11:10 pm

    Primarily, I sell options as leverage for the premium.

  8. Noe Silva
    July 20, 2021 at 11:10 pm

    So you don’t have to buy them or have the money for them? Or you at least have to have the lets soo 630 for the apple shares?

  9. Peppermint
    July 20, 2021 at 11:10 pm

    So do you have own the stock to buy the call option?

  10. jaybradley100
    July 20, 2021 at 11:10 pm

    I try and follow you but you talk so fast and you are throwing out numbers while you’re talking
    It’s difficult to follow..is it possible to simplify your language… I find your strategies helpful but highly complicated

  11. OG Reggie B
    July 20, 2021 at 11:10 pm

    SPACE AGE TRADER'S ALERT 📢 WEBULL, YOUTUBE FOLLOWERS AND FELLOW AMERICANS.

    I'm going to share with you guys the most important thing to remember when it comes to option trading.

    it's all about the delta and how you use it.
    Example: a delta of 0.90 is the same as 0.90 on the dollar.

    Buy Call of XYZ, delta 0.90
    Buy Puy of XYZ, delta 0.67
    subtract. . = 0.23
    difference between the numbers and the p&l is 0.23% on the dollar up or down.

    Remember where you heard it first
    OG Reggie B..

  12. Ramon Reynoso
    July 20, 2021 at 11:10 pm

    Subscribing for sure. Thank you!

  13. Jaime Salazar
    July 20, 2021 at 11:10 pm

    I’m using options to go big or go home

  14. Patricia Copper
    July 20, 2021 at 11:10 pm

    I make huge profits on my investment since I started trading with Mrs Debra Thomas, her trading strategies are top notch coupled with the little commission she charges on her trade

  15. Walter Nagbe
    July 20, 2021 at 11:10 pm

    Can I sell my call options nearing expiration date even when I am OTM?

  16. Walter Nagbe
    July 20, 2021 at 11:10 pm

    Thank you so much for your education on call/put options. I been wondering how it really works.

  17. Drake
    July 20, 2021 at 11:10 pm

    Thanks for the lesson DEVIL DOG, I want to get started but I've been nervous about doing my first options play. Any advice?

  18. Iz mark
    July 20, 2021 at 11:10 pm

    I was born/raised in Vegas, gambled…responsibly, this is better…way more odds though. Careful.

  19. Iz mark
    July 20, 2021 at 11:10 pm

    very easy to screw up, use the seven 'P's. I like it.

  20. Rajesh Saini
    July 20, 2021 at 11:10 pm

    This is just awesome . Never understood before this clearly . Great Job done Sir !!!

  21. xrugr
    July 20, 2021 at 11:10 pm

    My Favorite option strategy is a risk reversal with LEAPs which, if successful, I convert to a poor man's covered call.

  22. Chris Wenk
    July 20, 2021 at 11:10 pm

    Thanks Joseph for this great video! Do you always wait for the options to expire? or is it possible to get out of it before? If yes, what happens?

  23. H S
    July 20, 2021 at 11:10 pm

    Thanks for the informative video. I have a question; If I want to buy a stock that I like to keep for the long term, then does it make sense to sell a put option that is a year out expiration date in order to collect a high premium and get assigned with the stock? For example, stock XYZ trades at $100 today and I sell a put option $95 to collect a $12 premium. Within a week, stock XYZ dropped to $90 so I get assigned at $95, which ended up buying the XYZ at $83. Is this correct or are there any rules that I'm not aware of?

    Thanks for sharing your insight.

  24. Edil Binky
    July 20, 2021 at 11:10 pm

    just learning. thank you for this video!