Options 101 – Calls & Puts Explained
Categories: Option Trading Courses
About Course
The Foundations of Standardized Options Trading.
Welcome to the engine room of the global financial markets. Standardized options—traded on exchanges like the CBOE via brokers such as IBKR—are the professional’s choice for hedging and speculation. In this course, we strip away the jargon to explain how Call and Put contracts actually work.
Note: Unlike Spread Betting, these trades are subject to standard capital gains tax (CGT), but offer unmatched liquidity and precision for the serious investor.
What Will You Learn?
- The DNA of an Option Contract: Master the three non-negotiable elements of every standardized contract: Strike Price, Expiration Date, and Premium.
- The 'Rights' vs. 'Obligations' Framework: Clearly define your role as a buyer (owning a right) versus a seller (taking on an obligation) and how this dictates your risk.
- The 100-Share Multiplier: Understand the "Contract Unit" system used by brokers like IBKR, where every 1-point move in an option equals a $100 change in your account.
- Deciphering the Option Chain: Learn to read a professional trading board, identifying the Bid/Ask spread and filtering for liquidity to ensure you can always exit a trade.
- The Premium Formula: Break down any option price into its two core components: Intrinsic Value (tangible worth) and Time Value (the "melting" probability).
- Moneyness Mastery: Instantly identify if a trade is In-The-Money (ITM), At-The-Money (ATM), or Out-Of-The-Money (OTM) and why this determines your probability of profit.
- The Impact of Volatility: Understand how "Market Fear" (Implied Volatility) inflates or deflates the price of an option, and how to tell if you are overpaying for insurance.
Course Content
1. The Mechanics of the Contract
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Lesson 1.1: What is a Standardized Option?
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Lesson 1.2: Day to Day Examples of Call and Put Options
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Lesson 1.3: Call Options Buyers Vs Sellers
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Lesson 1.4: Put Options (The Bearish/Insurance Tool) Buyers Vs Sellers
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2. The Option Contract Terms
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Lesson 2.1: Strike Price, Expiry & Premium
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Lesson 2.2: The options exchange, Bid/Ask Spread & Liquidity
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Lesson 2.3: Call Option Example Apple
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Lesson 2.4: Put Option Example with Apple
00:00 -
Options 101 Quiz 1
3. Option Pricing and ‘Moneyness’
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Lesson 3.1: Intrinsic vs. Time Value
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Lesson 3.2: ITM, ATM, and OTM
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Lesson 3.3: Factors that impact Time Value (Extrinsic Value)
00:00 -
🎓 Why Trade Alone? Get a Professional in Your Corner.
4. Market Forces (The Greeks & Volatility)
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Lesson 4.1: Volatility – The “Engine” of Option Pricing
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Lesson 4.2: Introduction to The Greeks
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Options 101 Quiz 2
5. Course Graduation & Next Steps
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Lesson 5.1: Summary & The Professional Roadmap
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Lesson 5.2: Where to Go From Here?
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