REVEALED: How Options Trading Is Being Simplified
If you’re reading this, you’ll be happy to learn that there are a LOT of great options traders.
Yep…
People just like you who have some capital, some knowledge, and some instincts who are successfully making money trading options!
What you may not know is that most of them aren’t or don’t WANT to be famous.
Because if they’re famous...their secret might get out.
The secret: Options Trading Can Be Simplified!
Yes...most options traders want you to THINK it’s super complicated!
But the reality is, there are 3 simple elements.
First, figure out what MOVES options prices:
- Expiration of an option: The longer an option has before it expires, the more time the underlying market has to hit the strike price. So if you have two out-of-the-money options with identical strike prices on the same underlying market, the one with an expiry that is further out into the future should have a higher premium.
- Volatility: The more volatile an option’s underlying market, the more likely that it will hit its strike price. So if a market sees a sudden uplift in volatility, the options on it will tend to see a corresponding increase in their premiums.
- Level of market: When the underlying market is closer to the strike price of an option, it is more likely to hit the strike price and carry on moving. So an option on EUR/USD with a strike price that’s 50 points away from the current level of the market will be less likely to become profitable than one with a strike price that’s 15 points away, and therefore should have a lower premium.
There are other factors, but frankly these are the only ones that consistently deliver winning calls and puts to great options traders.
Second, analyze the risks.
Don’t let this scare you...it’s broken down into the simple ‘greeks’ in order to understand the risk and determine your next move.
Here’s a quick introduction to each one:
Delta – how much an option’s price moves for every point of movement in the underlying market. Delta is a measure of how movement in the underlying market will impact the price of your option, otherwise known as directional risk.
Gamma – how much an option’s delta moves for every point of movement in the underlying market. Gamma shows whether directional risk will increase if the underlying market moves.
Theta – how much an option’s price declines over time, or its time decay risk. An option with high theta (usually one with a short-term expiry) will rapidly depreciate in value as it nears its expiration date.
Vega – how much an option’s price moves when the volatility of the underlying market changes. An option with a vega of two will move two points when its underlying market’s implied volatility changes by 1%.
Rho – how much an option’s price moves when interest rates change. Rho can either be positive or negative, depending on whether the option’s price will improve when rates go up (positive) or down (negative).
Now, I’ve written an ebook that helps explain the 5 Basic (and profitable) Options Plays to help you actually APPLY the ‘Greeks’, download a FREE copy here.
Ok, the third and FINAL piece of the options trading simplicity strategy… is what STRATEGY you will use.
You have long calls and puts, short calls and puts, spreads, straddles and strangles and...BUTTERFLY strategies??!!...WHAT?!
Believe me...they sound more complicated than they REALLY are.
They’re basically how you DEPLOY a trade. Again...sounds complicated for a REASON!!
But today I want to actually give you the ability to TRADE successfully...that’s why I’ve written this best-selling Ebook:
The 5 Basic Plays of Trading Options
And TODAY...can I give it to you FREE?
See, any investor can trade options but to do so successfully requires a solid plan.
In this free options trading eBook you will learn:
- The basic definitions that you actually NEED
- The risks associated with trading options and how to manage them.
- Guide: A 5-step plan to successful options trading
- A proven, yet simple strategy for improving your odds of success in the markets