Most Options Traders Make at Least One of These 5 Mistakes | Options Crash Course
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- Опубліковано 6 лют 2025
- Jim Schultz, in his latest Option Returns Crash Course, highlights a strategic shift in trading options from buying to selling. He explains that short options provide higher probabilities, positive theta benefits as time passes, and capitalizes on volatility contraction. Emphasizing consistency and sustainability, Schultz advocates for trading short positions to lower directional risk (delta) and potentially increase profitability. He concludes that a potential annual return from selling options could range between 10%-18%, stressing the impact of time decay and market volatility.
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it's always a pleasure watching your Crash courses Jim. Appreciated.
It comes down to feeling comfortable believing you and your authentic content. No need for my back of mind to always look for the fraudulent selling attempts. Make you one of the few real, legit creators on the subject on UA-cam. Thank you for that
Never seen such a great understanding of Option Greeks. A great Professor in you Jim , indeed ! Appreciate your style of teaching from the bottom of my heart !!
Thank you so much for this presentation and the excellent teachings!!
A wonderfully organized presentation! Thank you!
Excellent video Jim! The way you explain is very easy to understand. Thank you!!!!
Great overview of the Greeks. Also worth mentioning is Gamma. I hoping we would see more about the type of spreads that help to manage these factors in a small account portfolio. Also worth mentioning is the combining options spreads and naked options that then can benefit from these factors. Its great to see the basics though well explained!
Best way I've ever seen this explained. Nice work!
I love your content Jim !
The best teacher. Period.
Love you, Dr. Jim
Jim you are the best!
Amazing course thanks a lot Jim ! From France !
You are my favorite!! Thank you. This is so helpful.
Your video brought so much value to me. Thanks so much!
Great content. You bring a lot of value to retail options traders.
You should make a "Trading options for dummies" HAHAHAHAH
Kidding, but that would be a success. I'm a dummy and you were a central piece in my learning curve. Couldn't have done without.
FYI: @31:25 Theta should all be negative i.e. -0.04, last box is +0.04
Keep up the good work 👌🏻
who designed did error
How old is this video? It says it was posted 4 weeks ago but there are comments from 5 months ago talking about Jim?? Looking for part 2. The link in the description seems to lead to an older 2 part seminar.
Thanks for the great video!
Thank you perfectly help me to come out of the confusion
Best discussion I've seen of realistic, fact based returns for VRP.
Thank you Dr.Jim
I finally "get it." Thank you Docor Jim, I was starting to think I was a bit thick in the head.
how is volatility calculated - I mean especially if there is an earnings report?
Hey brother, your audio and slides are off near the end where you’re talking about which Greek to consider most impactful. You need to switch the slide with Theta & Vega around.
44:44
Happy Holidays patman ... saw your post and timed it when I thought your post hit it......are you talking about the video at around the 44.40min mark? Somewhat new to options and the 1st 1/2 was a good review then it got hairy 😊 doing my best so if not would you pls reply at what min mark? it would help me understand & make the adjustment. BE SAFE & Thx👍
@@robertjimenez2986@45:09 I believe.
Great/ Best Video on explaining options! I see a photo in my mind of Spock on Star trek playing that multidimensional "chess" game - only the pieces are sailboats with the market as the 'wind' and Tasty Trade platform takes the complexity of that game and turns it into a Checkerboard game along with the Research Team offering wind calculations on predictable outcome of winning the game with suggested moves!
Great course
nice work.
Thanks Dr. Jim
very good
The most important crash course of our lifetime. Dr J bringing elite knowledge
thanks for the video! learned a lot. I rolled/adjusted a lot this last cycle (to bring down delta) and thought I was following mechanics but i get the feeling that with rolling i just kept getting further and further behind these last few months. how does rolling affect theta, vega? maybe i was just unlucky and i was just consistently incorrect directionally and volatility was expanding on my individual products
Thanks Dr Jim
@jim one of the most comprehensive yet succinct course that you put together - EVERYTHING you need to know to profitably trade options has been removed from You tube and made private. Would it be possible for us to view this again?
👏 a real pleasure
thank you so much
does this work with futures as well?
Lately I'm really considering keeping my theta somewhere around 0.1% of my account. It gives me a lot more peace of mind.
Very good explanation of the effects of the "Greeks". There were a few errors in the graphics, but I'm sure some more coaching of the intern that did them will fix that. Overall, well done.
You teach a ossama ❤❤❤❤
But that not how you should trade long calls or puts. You are only showing the expiration graph. The theoretical P/L graph is more telling. A move down of 1 or 2% in a few days will make you a nice profit. Never hold a call or put to expiration.
Long options are a gamble point blank. And the statistics show that clearly.
@@PathToProsper209 call it what you want, it makes money. Ever wonder why we keep moving up in SPX for no reason? Because of all the covered call selling in SPY. Market needs to move up to take that money otherwise market makers would go broke. I call that opportunity.
No, he's not the statistics show that most long options expire worthless that's because people don't understand how to use options. For instance, one of the beautiful things about long options is the ability to capture convexity because obviously unlike stocks the profit is not linear in options and if you understand, gamma, and how that impacts time to expiration, you can often get cheap long options and if they get one move correctly, they go up hundreds of percent. Like if you ever seen a few days before expiration a $.10 option go to $1.50. It happens all the time people don't understand the relationship between gamma and Delta as expiration gets closer and closer. You can also buy leaps and sell short options against your long position to where you reduce your cost basis to zero… And you could get great insurance against a large 345 sigma move like big black swan event if you go out every 60 to 90 days and by the 10 Delta put… Something like that you can pay that insurance for three or four years and lose every single trade with a 10 Delta but the day you are correct you will save your portfolio and maybe even make money on the short side if you use the similar strategy to this, you made money in 1999 2000 and you made money in 2007 and 2008 and you made money in 2020. It's cheap insurance just like any kind of insurance you hope you don't use it, but if you have to use it, you're super super thankful you had it
@@PathToProsper209
Hmm. So it’s like roulette, except the more bets there are for a certain number, the more likely that number gets hit. But, you can research everything about the roulette table and you can use charts to determine the likelihood of the destination before the ball drops or stops and you can pull out anytime before you lose everything. And you can reverse your bet midstream and bet on the likelihood it doesn’t hit your original position.
So yeah, it’s exactly like gambling.
Risk=potential
Long options ok if you buy deep ITM leap, then sell shorter DTE covered calls. Synthetic or poor man’s covered call. Thesis: Bullish over time. Alternative to buying the stock and you leverage for better ROI. But I agree with you….selling premium is the way to trade options for consistency and longevity. Selling CSP requires A lot of capital tho. Worse case with CSP on AAPL is you get assigned the stock (buy), and then just hold AAPL stock until it rebounds, while selling covered call (wheel strategy).
Yes, we've heard of it
what are the advantages and disadvantages of rolling a long otm put option 2 weeks before expiry vs 1 day before expiry?
Jim, was in middle of the options for beginners crash course, now removed 😞
I'm directionally correct a lot. I'm going to stick to buying options and selling them higher. seem this is just different risk, it's more risk. buying options is defined risk. who is holdings options to expiration? I just need profits. holding a long dated option directionally is cake. just go longer out.
Every trader, who sticks around long enough 😄, goes through all of these. Everyone starts with buying options, than they switch to selling premium, and the problem with that is that your risk is unlimited. And one bad trade will wipe out profits from the previous 10 profitable trades. After comes attempt at more complex strategies, the problem here is that being a retail trader you will always give up an edge - on the way in and out, doesn't matter much on 1 or 2 lots, but for any kind of volume - becomes important. Just trying to shorten learning curve for some - LEARN TO TRADE!!! there is no substitute for that.
37:57 you are selling put but earning with fall
Is daily lick , liquidity? What does that have to do with theta? The more liquidity the lower theta?
Daily liq is your net liquidity, the current value of the account if you closed all positions at the mid price. The theta to net liq ratio is between 1% and 5% of your account value to gauge a conservative to aggressive portfolio. For example, a conservative portfolio with a $10,000 value could have a theta number of 10 (1% of $10,000). This would mean the account collects $10 a day in theta.
3:56 narrator: he didn’t make a lot of money
9% a year with the risk to achieve that return isnt even worth it. Ide rather buy sp500. If I cant make 3-4x the average market return, the trading strategy is not worth it.
Does theta start to change more exponentially in the last 30 DTE? Or 45-30 DTE? Or??
It does
WTF would I aim for 10-18% annually? I could buy a managed ETF to get that return. I'm shooting for 3-5% per month and if I fail I still beat managed investments.
Yeah you could just buy QQQ. Fidelity says annualized return of 18%. Throw in some theta decay for an extra couple percent per month and you’re winning. Are you doing strangles or what?
@@AJohnson0325 Mostly I'm following Vol and doing the wheel on stocks that I trust. Trust first Vol second. Recently I bought some spy leaps and doing daily covered calls, not sure if it's going to work out better than wheeling but I sure don't like being locked into trading every day.
Same- looking for 1% a week if I can (and getting it). Most weeks are better. You can get that selling credit spreads on spx.
The number of Likes was 664. So I just had to like the video to make it 665. The next person to Like will be 666. I don't know what that means? As a side note interesting fact - back in the 2008 crash the S&P went to 666 LOW !!! What is that about?? This video is great on it's own and deserves a like no matter what the current count is. So give this video a LIKE !
I hope that 15%+ is more than doable. Otherwise, if you end up averaging the low end of 10% selling and trading options, then you are doing no better annually than if you had simply put all your money into an S&P 500 index fund (SPY?) and let it generate the average annual 10%, and instead spent your time doing things less stressful or time-consuming like writing poetry, bird watching, cloud watching or hanging out at the local espresso cafe, or something. No?
Local espresso cafe? You must be in Europe🤩
What will you add to SPY then ?
Spy works if you work hard and save a lot of what you make.
Trading works if you learn and work hard at trading.
There is no point in trading if you make good money other places and if you don't take stress well
I love the conclusion, but boy this video would have been a grand slam if he gave a simple example of what it actually means to hold 0.1% Theta on net liquid. I understood every single lesson of the video, except that formula. I need a dollars and cents example of what that means.
Please note the error in the Bearish Delta slide: the 30 delta call should reduce by $0.30 when the stock price decreases by $1.
Options are leverage. Pros sell options they don't buy them. If they want to go long or short something they just buy or sell the underlying asset. America's stock market is so over leveraged it is not even funny. When the bubbles pop, most are going to lose at leat 50% but probably more like 75%. That money does not just disapear... it goes to someone. I am so excited I can barely contain myself.
I really have an IQ problem. I will admit I can't understand any of this. When I see videos I dont understand or are to vague for me I just move on.
The videos are for those that understand the absolute basics.
I was in your position but when I watched the beginners videos on Sky View Trading UA-cam channel, it all started to make sense.
Start there and if you still don’t understand,then give up 😂
Just because you’re selling premium doesn’t mean it’s always going to work in your favor.
If it were ALWAYS….we wouldn’t be watching this video. We’d be sailing the Caribbean in our yachts.
more often the time it does tho
thanks but keep to stick with dividends stocks ! still complicated for me to spend money on nothing ! thanks quite overwhelming !
Its all greek to me 😅
A "system" folks that works in every market, every day. One that works with a 60+% win rate that exceeds the loss (profits).
Able to stay in it to succeed.
There you have it....The rest of this? Is click bait...
Suggesting that there would be an edge in going short options versus long because you have time working for you is some of the worst advice you can give to aspiring option traders. They are all set out to loose their pants sooner or later. For starters the volatility risk premium on individual names is very small, but more importantly, when not delta hedging, it is neglectable compared to the directional risks that both long and short traders take. And for retail traders the premium is too small to capture it with delta hedging as well, because of trading costs.
18 PERCENT a year is pathetic. You CAN time the market. Try technical analysis.
You can’t just simply sell an option. You must have collateral in the form of cash or stock or approval for a margin account from you broker. I should know because I can’t get approved by my broker.
True but this is just the ideology of it. Not the specifics
If you have the shares. They are covered puts or covered calls so you don’t need collateral. You just need to accept that the contract may get exercised or even auto exercised…1 contract per 100 shares
@@slowmotionjoe6263 The covered part is collateral.
@@slowmotionjoe6263 The covered part is collateral.
The covered part is collateral.
thank you!!!