While staring at an options chain getting ready to trade options, you’re reminded how everyone advises you to shift the odds in your favor. But why doesn’t anyone teach you how?
Success at buying options involves three things. You need to:
- Find a Target Stock price
- Pick the required amount of Time to reach your Target Stock Price
- Choose the right option
This is a normal options chain with Stock Price, Expiration date, and a lot of prices.
It’s the tool everyone uses to choose the option they want to trade.
It’s also the place where almost everyone gets confused. Where investors are left with the simple and obvious question:
“Which Option do I buy?”
Unfortunately, options education doesn’t give you an answer, leaving most people guessing.
And, guessing leads to guaranteed losses over time.
This new Options Chain helps you choose the Right Option while teaching you how to navigate the process yourself. A few things have been added:
- Here is where you’ll express YOUR UNIQUE VIEW on the stock.
- This area simply shows you the market’s sentiment.
- Where you find the data, we simply shaded EVERYTHING except these two windows. For Calls, here. And Puts, here.
- This is the stock price in white.
- Finally, we have this end column, the Risk Reward Breakeven Price (RR$). This is the market’s expectations. It’s the Stock Price at expiration built into that particular option which balances the risk and reward. It’s very important to know this price!
So, how do you find opportunity?
Your Unique View will create a pointer.
And you want the pointer to land in one of those windows.
Why is that?
Because that’s where the Smartest Investors in the world buy options.
How do you get the pointer there?
First, let me ask you: What is your unique stock view?
You need a Target Stock Price and your Confidence level on reaching that Target. Then, you’ll choose the amount of time you’ll need.
Let’s use a Target Stock Price of $232. It’s higher than the current Stock Price so you are looking at Calls. (The Puts get shaded)
This establishes the Pointer that will dictate some level of Mathematical Edge, where the reward outweighs the risk.
And the pointer lands here.
It has some Mathematical Edge (this is determined by the Target Stock Price being greater than the RR$), BUT it’s not in that window!
You’ll see a Warning sign pop up (on the right) to help you understand why that option isn’t ideal.
So, how do you get the pointer in that window?
You can use a higher Target Stock Price. More specifically, you can look at the RR$ column to guide you. The RR$ on the first option is $233.12.
If we changed the Target Stock Price to something higher than that, for example $235, you can see that the pointer moves to higher strikes.
Pick a very high Target Stock Price like $242, and you’ll see the pointer move further away. Perhaps even outside the window. In this case, another Warning Sign will pop up making sure that you double check your thoughts because you’re expectations exceed what the market is expecting by a wide margin. Listen, it’s great if your view is accurate, however, that much of a difference should be double checked.
How else can you move that pointer?
Try changing the Confidence Level.
Greater confidence in your Target Stock Price will allow you to get more aggressive in your choice of option, pushing the Pointer to higher Call Strikes.
Less Confidence will bring it back in.
Either way, you’re UNIQUE VIEW determines whether or not you have Edge.
Now, there are some more details about Edge that you can see by pressing here:
Once opened, you’ll see the Strike, the premium (which you can change to Bid price, or the Mid market price), the percentage probability of being ITM, the Risk Reward Breakeven Price, and these 3 columns: The OMS, Edge (%), and Actual (%).
In the Education area there are several short videos that will further explain what they are and how you can use them to better analyze your decision.
For a full explanation, watch 8 Steps to Understanding Options. If you’re familiar with options, then you can start at Step 5.
It’s that simple!
- You want the pointer to find Edge here just like the Smartest Investors do.
- The pointer is there to reflect your unique view on the Stock.
- And, it’s important to understand that when compared to the market’s expectations, your unique view on the stock is what creates the opportunity.
This NEW Options Chain shows you if, where, and how much opportunity exists. It finally teaches you how to shift the odds in your favor.
Get the best Options Education and start using this simple, yet powerful tool to get yourself thinking and trading like the Top 1%.