Options Trading Education: Should you own premium?

Want more options education? Check out our 6 chapter video series here: http://bit.ly/1HczQN0 Our options education content is free for a limited time only! So make sure you take advantage and watch the videos! The biggest mistake people make in options trading is they own puts or calls at the wrong time. People assume that if a stock is going down, puts will go up in value and vise versa with calls. However, that's not always the case. To succeed in options trading, you have to know the right time to own puts or calls, or own premium. In this video I reveal a simple way to identify if it is a market environment to own premium in. My explanation is easy to understand and simple to use on your own. All you need to do is look at the performance of at the money puts and calls and see if one of them is rising in value substantially. If they are, then you can own premium. If they are both down (which happens more often than you think), then you DO NOT want to own premium. So what can you do if you don't want to own premium? You can sell it of course! That's right, just like you can short a stock, you can also short options. Check out the following clips to watch trades in which I shorted options: Shorting NFLX options: https://www.youtube.com/watch?v=Wwkvprag_bo Shorting GOOGL options: https://www.youtube.com/watch?v=Ra_BufokAVk If you like what you see, consider signing up for our live chat room. I'm in there every day sharing insights and trade ideas. Membership is only $5.99 per month! Learn more: http://bit.ly/14SqABP Or if you're interested I offer a 7 day/$5 trial for 1-on-1 mentoring and live trading sessions. Learn more: http://bit.ly/1C0XXhE Subscribe to my channel for FREE videos: http://bit.ly/1CLl1Oy Follow me on twitter and request video charts on your favorite stock and ask me other questions! Follow: http://bit.ly/1GwAAl1

Comments

1. PCLN current IV% is 14% and that's very low, so it's best to be a buyer. AAPL is also very low at 6%, which is normal after a big event like earnings or product announcements. ADBE is currently at 53% so it would be a good candidate for selling options.
2. All you have to do is look at the relative amount of implied volatility on an annualized basis, which most trading platforms will provide. If the percentage is lower than 30% then the premium is low, if it is above 50% then it is high. If premium is low, then it's a good time to buy options, with the expectation that premium will increase, and therefore inflate the value of your option. If it is high, then it's best to sell the options.