Advanced Options Strategies: Rapid Fire
Chapters in this video
- 0:00 Unlimited risk: naked calls versus naked puts
- 2:02 Spread basics: capping gain and loss
- 3:56 CAL and PUSH: breakeven memory aids
- 4:55 Straddles: earthquake bets versus sleeping babies
- 6:28 Ratio call writes and Sam the supervisor's panic
- 7:03 Yield-based calls and the $100 multiplier
- 7:52 Rapid-fire exam recap
What this video covers
- Why uncovered (naked) call writing carries unlimited loss, and how that differs from the limited risk of an uncovered put
- How to classify any vertical spread by direction (bullish or bearish), debit or credit status, and which option sets the direction
- The golden rule that max gain plus max loss equals spread width for every vertical spread, and what that means for your T-chart
- Using the CAL and PUSH memory aids to nail call spread and put spread breakevens without hesitation
- Why a bear put spread is still a debit spread despite the word "sell," and other naming traps that cost points
- How straddles differ from spreads, and why long straddles want volatility while short straddles want stillness
- Where maximum loss occurs on a long straddle, and why short straddles and ratio call writes reintroduce unlimited upside risk
- Why a yield-based call profits when interest rates rise and is used to hedge bond portfolios, not bond calls or puts
- How index and yield-based options settle in cash with a standard $100 multiplier, and the OEX American-style exception
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