Introduction

I’ve taught my options course to thousands of investors from college students to hedge fund managers. And over the years, I’ve realized there was something very important missing in the process.

In everyone’s process!

You’re supposed to stretch before working out.
Practice before you play.
Before learning options, you need a warm-up session.
I’ve come up with a quick 7-part series to get your mind thinking.

7 Must Know Concepts Before Learning Options

What will this learning exercise do for you?

It’ll prepare you for what’s to come. It will help you to better understand how options work. And amazingly, it drastically cuts down the time you’ll need to absorb future lessons.

While some of these concepts may seem trivial, “obvious”, or “too easy,” I assure you they’ll make all the difference when you start the Options Course.

Here’s a video summary of the Options Course for your review. If you need to read a few testimonials, then jump HERE.

Options Course: Understand Options in 8 Steps

STEP 1

This class begins with a carnival game we all remember that highlights a central concept for understanding options. You’re then introduced to the two types of options – Calls and Puts, and start exploring how to value them at a specific moment in time. Step 1 leaves you with a challenge – an intriguing game to test your knowledge and solidify the concepts learned in this class.

Questions / Answers

STEP 2

The Options Game introduced in Step 1 helped you connect the concepts to gauge your understanding. By design, it most likely left you asking a few questions. Step 2 introduces a few more concepts – the Forward, Skew, and Volatility – in order to fill in the blanks.

Questions / Answers

STEP 3

By now you understand how to calculate an option’s value at the expiration date. Step 3 gets more granular and focuses on a specific option during the time period prior to the expiration date.  It then dissects the options premium into two parts and draws from concepts learned in the previous two lessons to help explain what you find inside.

Questions / Answers

STEP 4

Learning about options in the classroom is one thing, but how do they work in real life? This class makes the transition from concepts and theory into practice. Step 4 introduces the most important options tool you will use – The Options Chain. It helps you get comfortable navigating the Options Chain to find the information you’ll need to make trading decisions.

Questions / Answers

STEP 5

Until this point, everything you’ve learned is what the options industry has been teaching for many years. This is the start of new concepts and one new formula that focuses on a number which finally helps options make sense to the average investor. All the concepts you learned in the warm-up videos come into play here. Step 5 bridges old concepts with the new to help you analyze the relevant value of an option and more specifically, to help you understand how to approach the toughest options question every investor asks.

Questions / Answers

STEP 6

To find answers you need data and a process to analyze that data. This step outlines the various calculations needed to get answers. Going through each calculation helps you realize what the standard options chain is missing. But after the calculations, you’ll still need to balance two factors that are unique to you. Step 6 introduces these two factors and describes how you should think about them.

Questions / Answers

STEP 7

Leverage and Confidence play an important role in choosing the right option. It’s what make the choice of strike unique to you. Step 7 helps you to better understand where the Smartest Investors in the world buy options, what time frame they pick, which options you should avoid, and why. Finally, in the event you can’t find an opportunity to buy an option then it also offers an alternative solution.

Questions / Answers

STEP 8

We’ve taken a number from the Black-Scholes Formula and translated it into a Stock Price that represents the market’s expectations. This stock price offers the options buyer something to compare against his Target Stock Price in order to find Edge. Steps 6 and 7 have offered you a process to analyze that Edge. Step 8 gives you a step by step approach to practice on your own.

Questions / Answers

Start the Options Course now