Put Options Explained - Using Put Options to Protect Our Investments
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- Опубліковано 27 вер 2024
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In this video we explain how put options work.
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Sorry about the Lighting! I had some issues when filming this video. I'll get it fixed by the next video. I hope you found this video on put options interesting despite the lack of lighting video.
The Force is with us, Yoda ;)))
What if the stock rises in the same period of time, will you be able to sell at the increased price of the market or you have to wait until it expires?
This is just superb, been searching for "stock option trading blogs" for a while now, and I think this has helped. Ever heard of - Winoorfa Option Olegroson - (should be on google have a look ) ? Ive heard some incredible things about it and my brother in law got great success with it.
This was great, I been tryin to find out about "australian option trading" for a while now, and I think this has helped. You ever tried - Winoorfa Option Olegroson - (Have a quick look on google cant remember the place now ) ? Ive heard some pretty good things about it and my buddy got excellent results with it.
Jimmy, I would add three things to this video.
1. You only sell put options on companies you already want to buy, meaning full analysis has been done and meets your criteria.
2. That you sell at a strike price which would mean you would get the shares at a discount (or your margin of safety).
3. You could do this with companies you already own, and little by little reduce your cost basis.
If you do it like this then it’s A. You win because you get the premium 2. You win because you get the stock you want at a on sale price.
very important points made here thanks
I always make sure I watch all the ads from start to finish to ensure that it helps your channel because these videos are extremely informative. Thanks, Jimmy!
Much appreciated!!!!
I didn't realize that if you watch the ads in full, it helps Jimmy. Good to know!
I watch the ads to the end if they are short ads. Long ads are watched for 30+ seconds to ensure payment to Jimmy.
Jimmy - Congratulations on reaching 50K subscribers, well deserved.
Thanks!
Jimmy, you explain things in the way my brain works. If I could hug you, I would.
I have been waiting for this options vlog it is good.
Best explanation! Your videos should be rated much higher!!!
Just so that I'm clear, Emily's broker would liquidate Emily's holdings to make up the difference when her put option expired?
Exactly, unless of course she did something first. Like buy the 100 shares at whatever price they are at, or maybe buy back the put option to close her position and take the loss that way. Either way, the broker is going to get their $
Great video Jimmy. Very informative and detailed. 👍
Thanks 😊
I've watched 10 of these videos and concluded that options are the most convoluted beast I have ever seen.
It seems like a solution (a deeply complicated one) looking for a problem.
If I understood this correctly Put options you have more control ( you can go for it or expire it) VS Call options where you do not have that control? I will have to rewatch the video but as always. Thanks Jimmy.
Excellent video about a very dangerous strategy for those with no experience...... not sure I will ever try this unless I have a friend who can help.
Great vid Jimmy.....first options explained vid that actually explains options to beginners.
What if you are buying a naked put (without owning the stock)?
Thanks Jimmy, great explanation on put options.
Great as always Jimmy!
Amazing way to explain call options...I learned a lot, thanks!
Thanks ! Always great to include real example as you did
Awesome explanation of put options. Thank you for all your videos!
Good job, as always!!!
Me thinks Jimmy is always buying what Emily is selling! :)
The power of the box.
So, please correct me if I am wrong.
In a call option, the person who wants the asset in the future will have the right to decide whether or not to buy
In a put option, the person wanting to unload the asset will have the right to decide whether or not to sell
9:33 you made my day!!! Great explanation. Thanks
Awesome. In my opinion, you should be teaching at Harvard.
Quick question. With all the Game Stop business going on. A put option on GS now for 2023 could be for betting the price would fall.
Great video and excellent explanation Jimmy! Thank you!
If the stock price drops below your strike price, but there is still time until expiration date, do you still have to buy the shares immediately or you can wait until it goes up, and you still keep the premium ?
Do you have a course?
I'm trying to put one together, I'll let you know when I get it up and running 🙂👍
This was incredibly easy to follow. Thank you! Sub'd:)
Thanks your Vedic, I think Emily's potential loss is $60*100 shares=$6,000 , then plus the $224 fee, should be $6000-$224=$5776, is is correct?
Holy cow after days of searching the internet this illustration really clicked for me. Thanks so much I am gonna make some money next week !!!! :)
Do you actually need to own the shares to buy a put option?
I didn't know that call & put options are traded between investors. I thought particular companies issue them and investors buy them to be used...
I have a question: Emily have to buy the 100 Verizon shares after the expiration date, because the Verizon stock price went under 60$. Right? So after that Emily will own 100 shares of Verzion, which as you said it also probably won't bankrupt that easily. So if Emily is a long-term investor, its good for her, because she bought the Verizon shares on a better price than in the moment she bought the option?
depend on market. What if price of share drop to 30$ ??
She will buy those 100 shares at a strike price at 60$ , so at that moment she lost 3000 $. OK , she would keep 224$ premuim.
In case stock drop to 30 at expiration day , net loss 2776 $. 50% of capital
Price of stocks, can and do, go up and down.
I'm struggling to understand how puts are bearish. They seem more like insurance if the price drops, because if you're bearish you'd just sell or short.
Am I wrong?
Them being insurance assumes we already own the stock. But what if we thought the stock would go down, and we decided to simply buy a put option (which goes up in value when the stock falls) instead of shorting the stock. Hence the bearish stance on the stock
@@LearntoInvest but if you don't own the stock and you're buying a put, the other person has to buy them from you.
So if it falls below strike price you're forced to buy at current price and sell at strike to the seller of the put who is obligated so long as it is at the time agreed to?
good job explaining
Hi , thanks for the great video.
What happens if I don't close my put Option Through the Expiration Date? My short Put strike price is 760 and the stock price is 930. In my profile, it shows a negative profit now and the expiration date is 17June
great vid
Where do I buy options ?
If you sell a call or sell a put you are on the hook to execute when it expires?
If you buy put or call option if it's out of the money. Can you just let it expire worthless?
If they are out of the money than yes you can just them expire worthless. If they are in the money we are on the hook unless of course we buy back the option the close the position. That's another way to get out without being excercised
Amazing
I call myself sometimes degenerate in front of friends just because I kinda bet on options but with the knowledge and skills I have I dont have that big of a balls to sell them, + i think so im not degenerate enough. Yet!
What about putting puts without owning a share? :)
Very cool
I sell puts on stocks I’d be ok with buying even if it goes down
All i hear is call options, put options, cents , dollars LOL. I need to watch this a million times more to fully understand what it meant.
I’ll steer clear for now/likely forever. I saw what happened to Tesla shorts 🩳
Whaaaaaa!???
I WATCH all the way so you make the most money...... OFF TOPIC COMMENT...... what does a subsriber get for $79 dollars a month???????????? more possible stocks to buy...not clear to me
I lost thousands buying $V Call options for $150. I bought Aug 2018 with a exp Dec 21 2018. I learned being too early is the same thing as being wrong. I write this to tell people please DO NOT MESS WITH OPTIONS. You really have to know what you're doing and even if you do know. You could be too early and or wrong. Trading options is for experianced traders and the legends over at Wall Street Bets.
You clearly have no clue what’s going on with Wall Street bets subreddit and a lot of traders on UA-cam. Making decent gains is for any one. There is risk for everyone. But your experience doesn’t determine what’s good for anyone. I started and lost a little bit, trading simple options. I learned by failure by design. For 2020 I’ve started the year up 200% and I’m looking to close out at 400% on a small investment that I’m willing to invest. Not throwing my entire life saving, a lot of regular every day people use options premium they can collect with strategic high percentage trades to create passive income. It’s not rocket science I’d your willing to learn in a controlled manner or pace.
I like Emily better :-p
Me too 😁👍🙂
Jimmy moves too much when he talks
+++
So don’t trade options. Lol got it thanks
One day I hope to find a video that clearly explains options. Looks like I have failed to find it here :-(
I'm sorry to hear that. Maybe this one is better for you. I did this one a while back but hopefully, it helps. ua-cam.com/video/iyH6hVkaMcE/v-deo.html
that one is for put options. If you're more interested in options in general I also created this video that could help. ua-cam.com/video/ITKWggMfjjs/v-deo.html
If they both are terrible, please let me know and I'll see if I can come up with something better.
Thanks for the feedback!
@@LearntoInvest pls what do you do with a put option that expired in the money, help pls
Man stop moving so much I'm getting seasick and I'm in less then 2 min
Scott Henderson 😂 it hit me right before I read your comment... I made it to about 11-12 min then was getting dizzy as a MF 😂
Emily makes 221 doesn't she?
Why are you speaking like that? Are you in a hurry? Come on you are a grown up, improve your communications skills!
Option trading is where boys become men.... It is nuts but so fun
I have watched a lot of videos, and yours was the only one that actually made me fully understand everything involved with put options.
💯 yes finally!
Mte 👍👍👍
Stick to writing scripts, Puts are difficult to be profitable on. Just joking about the stick to scripts thing.
@@marcspardello1254 all good man lol yeah I have a big interest in learning/understanding finance. However, I'm the most cautious person when it comes to putting my own money into an investment
You are the best teacher! I swear! Within 15 minutes I understood more from you, than if any other person would explain!
Thanks for doing this Jimmy!
0:25 i died :)))))
Awesome video man ;)
Your Videos are great! I enjoy this style the best as I am learning to invest. Keep up the good work.
Thanks for going options!
Thanks for doing a lesson on options! More please!
Great video, Jimmy. Great explanation. Do you prefer AT&T or Verizon? I bought some at&t based on the dividend.
Hello Jimmy
Hi 🙂
Great explanation! So if I want to sell put options, it’s better if I do them with company’s I would want to own? Just in case the price does fall below the strike price, worst case scenario I end up with a stock I would love to have in my portfolio?
Sorry but you go to fast and are not concise. you lost me about half way thru.
Wow...!! Thos is a really good vid. Thanx.
You’re who Timothy Sykes thinks he is
Confusing as hell. Not my cup of tea
Thank you so much!!!!!!
I must actually own the underlying stock if I buy PUT option? or can I buy PUT option without owning the stock and close the option before expiration date? Thank you
You can buy a put without owning the stock 👍🙂
Jimmy love the vids im 13 years old should I gamble options or no?
Probably not! If you keep studying how they can be used, you'll eventually find ways to use options to improve your overall portfolio, and therefore take it away from gambling. 👍🙂
Buy put option is like security or insurance to make it more clear ....
Options are regulated by "levels". Selling puts on margin as described is a relatively high level option (selling naked puts). The most basic put selling level allows Cash Backed Puts. Basically you can sell a put at a strike price if you have the cash/collateral in your account to cover assignment at that strike price. In this example Emily would sell a put for $224 and keep $6000 cash in her account (and yes, she would get interest on the cash in her account too). Then she would wait until expiration date OR if she had a predetermined %-age win, to close her position. If on exp date the Put is in-the-money (ITM), she would be assigned the shares and her broker would take her cash. If the Put is out-of-the-money (OTM) at expiration, the sold put would expire worthless and she would keep her $6k(+interest) AND the $224. Best way of thinking about selling puts is that you are being paid to hold a Buy Limit on a stock. You are essentially providing insurance for put buyers. If you're going to do this, make sure it is a stock you really want, because more likely than not, you will eventually get assigned. BTW it's arguably the safest way to sell puts--cash backed. One KEY point: as options Sellers, time is your friend. As options Buyers, time is your enemy. Other variables, such as IV, etc.. are also super important. Many variables involved with options. Good reads: McMillan, "Options as a Strategic Investment". Passarelli, "Trading Options Greeks".
Isn’t her collateral $5,776 , the unlimited down side risk for selling naked put ( strike minus premium $60 - $2,24 = $57.76), think you segment this to limiting the unlimited down side risk but reduces total premium collected... put credit spread right ?
Kudos to Jimmy with his strategy and those who watched this valuable lesson before the market tanked and implemented it! Thank you very much for your clear explanation.
On most brokerage accounts Emily would need $6,000 cash to cover her put option until expiration. They lock that cash up so if you are assigned the brokerage firm is not left holding the bag.
Well done Jimmy. Options trading really isn’t that complicated. The difficulty I have is explaining Options to newbies .
Thank you for sharing your knowledge, listening to u one can derive that you are a well seasoned professional investor
You deserve a thumbs up !
The only guy I found that actually succeed ,for me, to explain call and put option 👍!
Your waist called and ask to take it easy on them. I enjoyed the lesson. Thank you
You keep glitching, Other than that, Good video!
Emily would have been screwed in March. This was like watching the future or now the past.
Doesnt she then have the option to let the option expire and not buy and lose 224 only?