Go to http://www.amazon.com/gp/product/B00JFB3V7O to learn more about Options Greeks. Let's take a look at what would happen to a purchase of a put, and let's purchase an at the money put. The $54 strike price put is at the money. Let's go directly to our trade termination date, which is July 7, and see how well we did, or lost. In this case, we lost $131. It's very similar. If you're wrong, obviously, you're going to be losing money on a purchase of a put, when the market rallies strongly. When we take a look at our early termination date, based on our stop loss, which was June 27, we only lost $77.50. Those are the scenarios for purchasing an option. Obviously, the best dollar gain that we received was an in the money call option, during that period. The next best gain was an at the money call option. We can also take a look at the gains potential for an out of the money call option. Let's take a quick look at that. Let's say we thought, "Yes, in fact, we were right. The market is going to rally strongly." We wanted to take as much advantage of that gain as possible. We wanted to gain as much money as possible, so we decided to buy an out of the money call option, to take advantage of that gain. Let's say that we thought the market would rise above the $57 level. We wanted to buy something very cheap, so we decided to buy the 57 call option, at the strike price of $57. Let's go directly to our end date, which was July 7, and see how we did. We gained $221. On a percentage basis, that's a huge gain. Purchasing an option for 18.5 cents, and then making $221 on that, with the option itself rising to $2.43. That's a fairly good gain. In fact, that's an excellent gain. But in dollar terms, it doesn't even come close to our in the money call option. We gained $221, versus $509 for our in the money option. You have to decide whether or not, if there is a strong rally coming, are you looking for percentage gains, or are you looking for total dollar gains? With the money that you need to allocate to that position, is the gain worth the extra risk? Remember, out of the money options will expire totally worthless. For more Options Greeks video be sure to check out our channel: http://www.youtube.com/channel/UCXr2lclULvZAUS7iaKfLQlg To learn more about the Genius Trading System course go to: http://www.amazon.com/gp/product/B00JFB3V7O Additional Tags ================ vertical spreads, options greeks, what is options trading, iron condor, option volatility, option spreads, options volatility, how to trade in options, option strategies, index options, equity options, virtual trading, options spreads, virtual options trading, options trading tutorial, option trading strategy, options trading course, how to trade stock options, options trading systems, options training, learning options, learn to trade options, option trading tutorial, options trading strategy, option trading course, option trading systems, options trading basics, option trading basics, option trading system, options trading courses, options trading training, trade options, what is a stock option, options strategies
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