Tackle Today: Put Options
February 10, 2022
«Bears can play too!»
Traders,
We gave call options two days of love. Now we’re giving put options the same treatment. They are virtually identical except for one thing. See if you can spot the difference among the following characteristics:
- A put is a contract that usually controls 100 shares of stock.
- It gives you the right to sell shares of stock at a set price, known as the strike price.
- It has an expiration date and loses value as time passes.
- it increases in value as the stock falls and decreases in value as the stock rises.
The main contrast between calls and puts is that the latter gives you the right to sell stock. Thus, it becomes more valuable if the stock drops in value. Bulls buy calls; bears buy puts.
Buying a put is an alternative to shorting stock. It offers the same leverage and limited liability as a long call. But the defined risk is even more critical because it allows you to dodge the unlimited risk inherent with shorting.
In addition, you aren’t allowed to short stock in a retirement account. But you can buy puts! Thus, it opens the door to bearish trades for those trading in an IRA.
🛑 Upcoming Options Trading 101 Webinar: How to Swing Trade with Options with Coach Tyler Craig | February 14th, 2022 at 8:30 PM EST on YouTube
In this webinar you will learn:
✅ What is Swing Trading
✅ How to use Technical Analysis to identify entry points
✅ What is a Long Call Option
✅ Long Call Risk Graph
✅ What is a Long Put Option
✅ Long Put Risk Graph
✅ How to Swing Trade with Options
Click on the button below to go to YouTube and set a reminder so you won’t miss it when Coach Tyler goes LIVE.
Video of the Day: Jedi Options – Long Stock vs Long Call
In today’s Jedi Options, Coach Tyler teaches the difference between Long Stock and Long Call.
Chart of the Day: Copper Breaks Out (/HG)
Copper futures soared on Wednesday, breathing new life into FCX and other commodity-related plays. This is one of many bullish omens for the market during yesterday’s session.
Today’s Line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
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.
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