≈ Options made easy. ≈
Just like in the “Omelet & the Eggs” story—available here —, there is another trading story entirely inspired by a conversation I had with a friend over WhatsApp. I won’t say his name for obvious privacy reasons, but Anderson has not only been a friend of mine for almost 25 years, but we were also colleagues and co-workers in the veterinarian practice. Although we live oceans apart today, we still keep in contact with each other. He even came to pay a visit to me here in Italy.
So, one evening we were sitting at my dining table and he started asking me a bunch of things about the financial markets. He got excited about starting investing and as soon as he got back to Brazil he started studying.
— It’s quite interesting this options thing. Can you teach me something really basic? How to profit? How do they work?
That’s is when we begin having problems: How to go really, REALLY basic with options? It is such a complex world: Greeks (Delta, Theta, Gamma, Vega, Rho), open interest, volume, bid/ask price, ITM, ATM, OTM, beta weight, DTE, GTC orders, calls, puts, assignment, exercise, rolling up, down, in and out, credit, debit, spread, calendar, vertical, LEAP, covered, naked, condors, butterflies, strike price, strangles and straddles, long, short, inverted, volatility, growth, speculation, portfolio design, risk management, contracts, rights, obligations, net liquidation, trade price, mark price.
I gotta be honest: for a moment I thought that was it. Game over. Not gonna work. I will be damned, doomed and sink into oblivion.
In the end, the M.I.S. approach—Make It Simple—, worked out pretty well.
Chart of the Day
Table of Spreads
For those of you who struggle with the difference between vertical, horizontal and diagonal spreads, check this table (redesigned from the original one). The credit goes entirely to Micah Brooks, a great educator. One image, 100 hours saved (possibly, millions of neuron cells saved too).
Video of the Day
Introduction to the Black-Scholes formula | Khan Academy
If you are interested in learning the Black-Scholes formula, I strongly recommend you watch the video below, from Khan Academy on YouTube.
Today’s line up
Traders Lounge 11 PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show 8:30 PM EST
This is our weekly MasterMind group. Join the coaches tonight, 8:30pm EST to discuss the markets and help you prepare for the week.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Financial freedom is a journey
The Tackle Today series is brought to you by Tackle Trading.
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
# Sign up now for a 15-DAY FREE TRIAL #
Legal Disclaimer
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.
