okay this section is critically important so make sure you read through the whole thing and watch the video because if you don't understand how options work you are not going to make any money and you're probably going to lose money because you have no idea what you're doing um with this strategy you can trade stocks right because what an option is is it's a contract that is for like the where it goes right up or down it's predicated on the underlying asset right which means if the stock goes up and you placed calls on the
said stock the value of that options contract will also go up right so you can uh just play regular stocks but you're not going to make as much money not nearly as much and the options are more expensive so if you don't have the money to trade options just uh playing regular stocks is going to work just fine but like I said um you know I can make as much money and how the stock market typically works is you need to have a bit of money to make money and not just because you can make
money faster but also it is inevitable that you lose in the stock market this is something that happens to everybody I don't care how good they say they are if they say they never lose they are lying to you they're scamming you and I would run away from that person because it's inevitable everybody's lost in the stock market so if you don't have a cushion a little bit of you know money set back to where if you do lose a trade then you can you know put money back in and keep trading because that's the
game right you have to win more than you lose and if you can accomplish that then you're you're golden right you just have to win more than you lose so with options it's a bit more scary for small account right but it does work out well because if you win a couple contracts in a row you've just like 3x to your entire account if you had a little one right um so if you can get on a hot streak first couple trades you're set right because then you just made your your cushion and you pull
that money back you don't trade with that you let it sit in your bank account and you let it sit in your brokerage account and not do anything because if you do lose a trade with your your money that you are playing with you have the money sitting in your account you throw it back in there you're back in the game baby um so yeah but now that we have got that out of the way and options contract is basically what well I already said you're just buying a contract of a hundred shares of the
stock and what you could do is you can either place a call or a put now a call means you think you're gonna you think the stock is going to go up right so if you place an options call on a stock and the stock goes down you just lost all your money not actually there's like variations but if the stock goes all the way down like 100 then you lost on that call contract you probably lost all your money and a put means you think it's going to go down so say you place puts
and the stock goes down you just made a ton of money so this is negative this is bullish or I mean this is bearish right you think the Stock's going to go down here and this is bullish you think the Stock's gonna go up but there are special conditions with options it's not like a stock where you hold it and if you hold it and don't sell it even if the Stock's going down and it loses its value after a while the stock will recover and it's okay everything's fine and good you made your money
back not so with options it's much more dangerous and that's why I mean it's it's a lot more risky but with more risk comes more reward as with anything in life so the major risks with options is it comes with something called time Decay right and it has an expiration date so you can buy what I usually do is I buy my contracts let me see if I can find it yep expiration date I buy my contracts with an expiration date out like two months okay which means two months after I buy that contract if
I haven't sold it expires worthless all right here's why it expires worthless okay something called time Decay and this is exponential by the way so um waiting till the last second also doesn't work so what happens here is over time the options contract loses its value okay so the closer you get to your expiration date the less valuable it's going to become okay and if you wait too long and you try to sell at the last second it's gonna you're gonna sell worthless so you want to sell even though the expiration date is set out
for two months you don't actually have two months to sell this thing you need to sell it sometime sooner even if it's for a loss because if you wait till the last day you're going to lose everything okay so those are the two major differences and risk factors when it comes to trading options that's a big difference it's it's not invest long-term investment strategy this is something you have to actively be watching and monitoring and I know this is super like super super Baseline understanding of how options work and I know a lot of you
are probably like that was the most obvious thing in the world but there's a few people that don't know that stuff and you know they need this guidance when going into to trading options because maybe they're brand new so this is stuff that has to be covered and if you guys want more detailed information about like Risk Management the Deltas and all that and more analytical data on how options work then you should just read through this
