Comments by "" (@ThePlainBagel) on "Stock Options Explained" video.

  1. Happy Friday everyone! Have you ever used stock options, or do you prefer sticking to traditional investments? Let me know!
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  2. The way some people use options, probably! But if used in combination with stocks the can actually reduce the risk of your positions
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  3. T series got nothing on this
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  4. That is half accurate! I do write the scripts myself though!
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  5. I can certainly cover the different types of market orders, but yeah I'll probably avoid the specific active strategies people use with them. I've added it to the list of topics to cover, thanks for the idea! :)
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  6. Fair enough! I imagine for many it will be treated the same
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  7. If you buy or sell them? If you think one side is rigged, just do the other...
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  8. Thank you!
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  9. If it's for 100 shares, then yes I believe that math checks out!
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  10. Bet: an act of risking a sum of money on the outcome of a future event. I don't understand why this isn't an appropriate analogy. You are betting the premium of the option that a stock's price will move a certain direction. If you're correct, you earn a profit, if you are not correct, you lose the premium you paid.
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  11. With options you never have to buy the stocks. It’s just that, an “option.” You couldn’t sell the option after its expiration, but I believe before/on the date you could sell the option if it’s in-the-money to another investor so that they can use it, that way you get to take advantage of the option’s value without buying the stock. Hope that answers your question!
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  12. Certainly I would think that more institutional investors use options than retail investors, but some people love trading options in their personal accounts. I believe you can hold them in registered accounts
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  13. I was a finance major but I ran workshops in economics :) thanks for the kind words! Don’t have an Instagram account yet
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  14. It’s a complicated process that involves brokers, investment bankers and a guy named Frank, but they’re the best bagels around
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  15. It’s only to purchase the option, you’d also have to pay the strike price.
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  16. Dan H it all depends but my first thought would be that options would be safer because, again, you’re paying an upfront fee for limited downside risk. But I’ll look more into it and answer this next Q&A vid :)
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  17. Again, I used “bet” as an analogy for how options work, and I maintain that it’s a darn good one. Here’s why. When you buy a stock, you are purchasing a percentage ownership of the company, but when you buy an option, you aren’t dealing directly with the company in question and you aren’t receiving ownership of their business. You are instead reaching an agreement with a third party (SIMILAR TO A BET) that, should certain conditions be met, you will be able to buy or sell the underlying stock at a given price. But the term was intended to be used as a loose descriptor; I’d be happy to use it when describing stocks too if you’d like (a stock is a bet that a company will perform well). I don’t understand why the term offends you.
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  18.  @thumbodyelse21  I understand; yes I should clarify that I don't view options as an inherent gamble. I'll be conscious of the implication moving forward.
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  19. Thanks for the kind words!
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  20. I use Adobe Premiere (CS6 I believe is the version).
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  21. I believe you can, however options get much more expensive the longer they last. Option sellers know that the longer an option is outstanding, the greater the chance the user will find an opportunity to profit big from the option (at the seller's expense), so they increase the premium higher and higher. It can make for a pretty higher break-even point when you start looking at year-long options.
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  22. You pay the premium regardless, and then if you exercise the option, you ALSO have to pay the strike price. Hope that clears things up!
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  23. No, the “in-the-money” status is only based on the current price. So as soon as the call becomes unprofitable, it’s no longer in-the-money. Hope that answers your question!
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  24. Damn you actually beat me too...
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  25. So with your example, if you thought the stock would be $5 higher within a month, but you wanted to limit your downside, you could buy a call option for, say, $2 that has a strike price of $50. If the stock goes up to $55, you pay the $50 for the stock, and while you lose the $2 premium you stay make $3. If the stock falls to $45, $35, or even $0, you are only down the $2 you paid for the stock option. Hope that clears things up!
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  26. For most people understanding the basics is certainly sufficient, glad I could help!
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  27. If the price of the call is 10 cents per share (or $10 for 100 shares), then you would be down the $10 if the call expired out of the money (i.e. the price ends up staying at $30). But you have the right idea, the "deposit" you put is the only amount of money you lose, and then if the price does go up to $34 (for example), you could exercise the option and buy 100 shares at $32 each ($3200) for a profit of $200-$10=$180. You don't get the price of the option back
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  28. Hahaha fair point
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  29. Glad you find them useful!
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  30. Can you provide the time code for which graph you are referring to?
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  31. I'll add it to my list of topics to cover :)
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  32. Thank you that's very kind!
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  33. Your first point is correct, to the second point no options aren’t always settled in cash, but they can be, and to the third point I’m not actually sure. I would expect that the platform on which the options are sold would carry out a margin call of sorts to the seller if they were out of the money. Hope this clears things up!
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  34. It depends what option you have (is it a call or a put?); also if you let you option expire you get nothing (i.e. you'll lose your $30).
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  35. What you pay is the maximum amount you can lose. After that you have no money at risk (you COULD exercise your option at a loss, but there's no obligation to do so)
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  36. jooky87 glad you found it helpful!
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  37. Darcy Fitzpatrick they certainly are to some degree; if used in a certain way though they can be a powerful hedging tool, though the benefits they provide are temporary
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  38. A very niche compliment...thanks!
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  39. Hi there, no that wouldn’t be how it works. The price of the option is in addition to the strike price, so no one would pay 23 to be an option that lets them pay another 13 for the $23 dollar stock. It’s price is roughly what you’ll be able to resell for. Hope that makes sense
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  40. Hahaha glad I could help!
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  41. Haha thanks!
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  42. The problem is that the cost of the options rise dramatically when there's heightened risk. Afterall, the sellers of the option see everything happening with COVID-19 too and they'll charge you more for the security of an option. That means prices will have to swing a lot wider for you to profit from an option: if a stock costs $50, you have a put option that lets you sell at $48, but it cost you $10 (a share we'll say), then you'll need the price to fall to $38 just to break even.
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  43. Barnaby Graham I’ve actually been trying to tame my hand gestures haha
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  44. Thanks!
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