Epilogue

Epilogue

We hope that this course has given you a gentle introduction to the world of options trading. Out of this entire course, the biggest take-away should be that options require traders to understand and make trade-offs.

When you invest and trade in stocks, you only need to decide on the company and the price at which you are interested in buying and/or selling. With options, you need to consider the underlying, the option type (call or put), strike price, and expiration date. Investing or trading stocks requires you to have an idea about the direction that the stock will move in the future. Options require you to have an idea about the direction of the underlying, or lack thereof, as well as the timing of the direction.

Due to these additional considerations with options trading, you can “‘choose your own adventure’”. As a trader, you can decide if you want to accept a potential higher loss in exchange for greater upside or maybe accept a reduced max gain to increase your odds of making a profit.

As you get started on your trader journey, always remember that options allow you to decide on the

• Amount you can gain (the max win)
• Amount you are risking (the max loss)
• The likelihood of your trade ending in a profit (the breakeven point)

In our next course, we will explore options even further and will provide education into option pricing, volatility, and the Greeks. We introduced the option chain but we have only covered a few of the data points in it. This next course will cover the rest of them and explain why they are important and how they can be used to make you a more effective trader. Specifically, we want to be able to help you answer the following questions:

1. How are options priced? If you want to buy low and sell high, how do you “spot a deal”?
2. What happens to option prices if factors like time or the underlying stock price change?

In the subsequent courses, we will cover option strategies (ex: long straddle, bull call spread, etc.) and trade execution (ex: entering positions, managing, exiting).

Stay Safe. Trade Smart.