Today we are going to be talking about how to make $100 per day by trading stock options. and this is going to be a list of concrete and most importantly, actionable steps that you could take immediately after watching this video. But I'm not trying to kid you, the methods on this list only work. If you do, you're going to need to put a substantial amount of effort into practicing and finding opportunities where you can apply these steps.

And while there are many different ways to make $100 per day by trading options, the methods that I'm going to be presenting on this list are going to be some of the most straightforward. This is a no frills guide to trading options, and perhaps most beautifully, you don't need to know anything about options. Going into this video. you won't be lost.

I'm going to explain everything along the way, but most of you do already know that there are some major benefits to trading options. For example, you can substantially increase the proportion of your gains. They give you the leveraging power to multiply your gains while also using less capital. and when done correctly, options can be a beautiful tool to help you earn more consistent profits.

So let's go ahead and do a quick preview of what's going to happen in this video. So in the first part, we are going to be going through what options are and why They can be an excellent tool for growing your account if you are already familiar with options. I'll put a timestamp so that you could skip to the next section. In the second section or the second part, we are going to introduce and demonstrate options trading through simulated examples.

I'm actually going to take you through an options trade and then in the third part we're going to be talking about the different patterns to look for and how to scan for opportunities or how to find opportunities. And then I'll introduce some other ways to make money trading options. This is a very foundational course on how to make $100 a day trading options. There's many different things that you should know about trading options, but but I tried to formulate this on sort of a need-to-know basis so that if you know nothing, you could still implement the steps in this video based on the information that's solely in this video.

So in return for all this beautiful value, the only thing I ask of you is that you hit that ravishing like button and boy is that ravishing and also subscribe for more short, sweet and simplified videos on how to trade the stock market. Ok so to start, if you know absolutely nothing about options, this is the time where I'm going to take you through some of the most and terminology. If you are already an options addict then feel free to skip to this timestamp. So options put quite simply are a ravishing tool that we use as traders to profit off the fluctuations of the market.

It allows us to amplify it in quite a beautiful way. These are extremely useful for traders who want to focus on larger cap stocks that have small intraday movements. The benefit of options, much like I just said, is that they efficiently leverage the power of each dollar that you bring to the market. But simply, your account may not be able to buy 100 shares of Facebook at a total of around $20,000 But Training Options allows you to control the same 100 shares of Facebook bit, ball it and say a three thousand dollar investment.

And this is valuable because in a stock like Facebook the share prices don't move that much so we will need to have a lot of shares in order to actually see a decent dollar gain when we're looking at our P&L So this is where options come in and there are just two types of options and two different actions that you can take on them. One is the call option and one is the put option and with each of these, you have the ability to either buy or sell. When you are buying an option, you pay a specified price or premium just to own it. When you sell an option, you immediately receive a credit as you are the one that has paid the premium.

Now of course, since this video is focused on trading options, you don't really have to worry about paying or receiving premium because that's a whole other subject. Now, if you are bullish on the stock aka you think the stock is going to increase, you can elect to buy a call option or sell a put option. If you are bearish on a stock, do you think a stock is going to decrease? you can elect to sell a call option or buy a put option and that's pretty much the foundation of it. And these options are basically electronic contracts that have both a specified value called the strike price as well as a specified expiration date.

And with that in mind, the price of options varies based on movements in the share price as well as time decay since there is an expiration date. But since this tutorial is going to be based on short-term trading of options, we are going to be trading stocks that have an expiration date of around 50 to 60 days in the future and that's we don't have to worry about decay that much because we aren't holding them long enough for that to be relevant. and that's basically options 101 and everything you really need to know at this point. So go into Options 102.

So going further, here's our options pricing table. We have all of the different expiration dates, the Greeks to buy and ask prices for both our call and put options and we have our beautiful strike price. We are focusing on short term positions, so we want a date that's far enough in the future that we don't have to deal with the expiration date time decay that I mentioned earlier again because options contracts lose value as they get closer to their expiration date. But we also don't want the day to be too far because then we'd have to worry about interest rates being factored in and the perfect space for that is about 50 to 60 days out.

There's also a liquidity reason for doing this, which we'll talk about later, but you can see the dates on the options pricing table along with how many days away you are now. One Options contract accounts for 100 shares, so if you buy one option, you now have the option for 100 shares. This is also called a lot. The buy and asking prices per lot are displayed here.

Now the highlighted contracts. You'll notice there's a highlighted area and a non highlighted area. Now, the highlighted contracts are called in-the-money contracts and the non highlighted ones are called out-of-the-money contracts. That's just a fancy way of saying that if you were to execute on the contract now that you would make money, you would be in the money.

Your strike price is at a favorable distance based on where the current trading price is. Since call options are positive in value when the current market value is above the strike price, that means that anything below the current trading price is going to be considered in the money. Likewise, since put options are the opposite and are valuable when the strike price is above the current market value of the underlying stock, that means that anything above the current price is going to be considered in the money and anything below is going to be considered out of the money. Now there's also our Greek letters.

Since we are trading short term and not holding, let's go ahead and focus on the Delta Delta is how much money we make per dollar of increase in the actual share price. If we have a Delta of 85 cents. for example. that means that for every $1 increase, we just made 85 dollars.

If you're just buying the underlying asset, Facebook every $1 increase would only account for one dollar, so you can already see the difference in power. Likewise with put options, D Delta does the same thing, but is negative. Since put options are a bearish position, you are expect any price to go down, so every increase, every increase is bad. and thus deltas are negative.

If the stock price that you have a put option on goes up by one dollar, you lose money. and that is why IV Deltas are negative. But if the stock price goes down by one dollar, this works in your favor. If you have a Delta of, say negative 84 cents, that means that if Facebook goes down by just one dollar, you now just made 84 dollars and the Gamma Greek letter.

That's the incremental change or the acceleration that's going to happen after that first dollar. How much does it change in terms of each additional dollar that you win or lose? But I don't want to go into that too much. We'll just leave it at this because it is a step-by-step tutorial. But anyways, the point is that in general we do want to have a Delta that is high so that we can make more dollars per dollar of increase.

Okay, great. So now as the Russians say it's finally time to drink some vodka, we are now ready to pair our new option skills with the movements of actual stocks. So we're looking at Facebook. We see that hey, look, it's over sold on the Hora site.

That means it's a good deal. Anything below fair value is a good deal, but anything below oversold is a very good deal. So we're gonna go ahead and look in here and we're testing a conformation. We're still underneath the SMA line, but if we cross over it, that'll mean that we're in conformation territory.

We would have just had a confirmation. Now it's not exactly crossing over. What we need is the first candlestick to hold above the SMA line. and if we have that, that means that we'll be looking for price.

Drake's much like over here. we had price breaks. See if you bought in a conformation here, you could write the price ranked and then you know when it starts to decrease. But over here we're testing the same thing.

So if we see conformation then we can take a position and we can amplify our games using the the contract option set up and we have upward potential all the way to today's highs at 194 ish. So beautiful-beautiful upward potential. It wouldn't be great upward potential if you were taking an actual position because that's only a couple dollars. we'd have to buy a lot, but with a contract, that's not really the case.

So while we're waiting for confirmation, let's go ahead and get our contract set up so that when we do see a confirmation, if we see a confirmation, we can then execute on it. So let's go over here to trade. Now this wouldn't have been opened I had it opened earlier. but you're gonna see this when you go over to trade And you could pick what date we're going to once.

I've been 50 to 60 days away and we have all of these different options. It's really quite beautiful we have. This is the most important part is our volume and our open interest. Now we need a good combination of Delta volume and just overall contract price.

With we are stuck in a contract that doesn't have any liquidity, then we're not going to be able to get out so it doesn't matter how great the Delta is if we can't get out or get in. Really for that point. So let's go ahead and execute on this one where we have this all set up. So if we do see a confirmation then we can take advantage of that.

See if we have a confirmation look, we actually have a confirmation. Okay, let's go ahead and execute on it. Send: Okay, did it did it fill? Yep, it filled. We're down $5 Beautiful! Okay, so now we have a confirmation.

let's see how we do with this confirmation. Price Strength Price Strength Okay, let's go ahead and fast-forward it. Se215: How are we doing? Okay So we had a little bit of price strength over. after this conformation.

we had some price strength. We had a red candle, but we still hold because we're still over the estimated. Which shows that we still do have some price strength unless you're very conservative and you're using validation points for this. But if you're not using validation points you're going to be using, you're going to just be judging this based on the price strength.

It's based on you know, kind of like your experience level and where you are in the market and what type of stock you're trading. But for a mainstream stock, it doesn't really pay to be too conservative and use validation points instead. I'd recommend measuring the price strength over the SMA line. Then we continued seeing some run ups.

Then we continued seeing some running up. boom boom boom boom and then some weakening of price strength. Again, me, price strength is the real estate between the SMA line and the price action. And then we saw some struggling back-and-forth Now this is the first candlestick holding below the SMA line.

I'm gonna go ahead and say that we're going to take our profits here. It looks like it's going down. so let's go ahead and take our profits. We have a P&L of $370 Let's go ahead and take our profits.

sell. We're selling the contract that we had already filled earlier and boom and now we have P&L $370 on this beautiful simulated trade that I cherry-pick to show you guys how this was work. But in any case, this is an options trade. This is how you'd execute on it.

If you'd like to practice, you can use this beautiful on-demand feature. Do you practice on actual price action? And the key with this though is that you just because. you know. In this case, it went up right.

But it didn't have to go up. So it's very important to make sure that you're cutting losses quickly. If you're not cutting losses quickly, you're going to expose yourself up to a lot more risk. And while the profits are multiplied in our favor, in this case, if the stock price had gone down, or if something didn't go according to plan, our losses would have been multiplied as well.

And that's the reason why there's so many different ways to manage your risk. And I present a ton of them on this channel I Have a whole trading tutorials playlist with just a ton of material that you could use to manage your risk when trading within the stock market. Okay, but what if you're trying to benefit off a overbought play or an overreaction play? So we see AMD on this particular day gapped up massively looks like in the pre pre market probably or after hours and it gapped up massively right. It opened up much higher than it was a closed at 2759 and then it opened up at 29 15 and now it's breaking down.

So let's play this like an overreaction. We have a green candlestick in to rate candlesticks and it does look like it's going up. Okay, so we do have a green candlestick, but let's just go ahead and get our order ready. just so we have this ready.

We're looking for something over 50 days. Here's 51 days and I already have this highlighted, but this was the put option. Since we're going short, we think the stock is going to go down. looks like it has another red candlestick so we'd better hurry, but it looks like it's going to go down.

So what we're going to take is we're going to go ahead and buy a put option now this time. I'm only gonna do one because I think that's a little bit more realistic the last time I did 10, when are we doing Facebook But this time I'm only gonna do one just because I Think most people are gonna start off with at least one contract, so confirm Sin. Okay, still red. Now not to mislead you though, this isn't You don't take a position just because there's two red candlesticks and it looks or feels like it's going to go down.

This is an overbought play that gapped up massively after hours and in the pre-market and then you'd opened higher. but then all of a sudden started breaking down and it's closing the gap between the real estate and the price action. Now, the question here is will it continue? Well, we don't know that at this point. Obviously this is a simulated play.

so I already know what's going to happen. But if we were looking at this in the market, we're not going to know. We just see the green canvas like this could be the sign of a reversal or increased price strength over the SMA line. We don't know, we don't know yet.

So let's go ahead and fast-forward this a little bit just to get a better idea of how this trades. Okay, so we continue to see the price action going down and we have three red candlesticks now. So let's go ahead and go back over to our options tab and see how we're doing on P&L So a P&L we've made $12 in 10 minutes. Okay, let's go ahead - let's make it 7:10 Obviously if you're trading intraday, you'd have a bunch of alerts, a bunch of alerts that would alert you to what's happening so that you could look at other positions as well.

But in any case, we our back to the SMA line. the price action is completely closed and our struggling back and forth over it and looks like it's trying to attempt to stay above it, but it's not doing such a good job. In any case, you quite a decent amount down. Let's see how we're doing on P&L One dollar.

Not so good. Ok, but in any case, we're still in the game. No reason to close our position because we still have. Ok so what ended up happening? What's what ended up happening is it went from overbought and we shorted it up here.

took a put option, we didn't short it, we took a put option and all of a sudden it couldn't Couldn't keep above. He couldn't hold its price drink over the SMA line so it rapidly broke down and now we're almost at the reversal line or a long-term s the main line. In any case, there's no signs of it going back up. It's a pretty strong downtrend, but we're going to go ahead and check our P&L and see how we're doing.

Now we're at $480 now. This was just one contract. This example is actually what I would say is a little bit better as an example than the last one I gave because most people are going to be buying 10 contracts at Facebook when you just started. But anyways, if it does hold on our long-term SMA line I might consider just exiting the position and taking my profits.

If it doesn't hold, then we might continue just holding it so that we can profit off a more sustained downtrend. Usually when it breaks down below the low resume line or the big or the long term SMA line. what happens is that's a sign of a reversal of direction, and if it's a downward direction, it's more likely to continue going downward. and as we know, your previous support becomes the resistance, previous support becomes new resistance and vice-versa So it could change the direction of the stock and we do have a strong downtrend on this.

But in any case, just because this is an example, we're not going to be too greedy, especially because this is a simulated trade, so we're just going to go ahead and resell our option. Yes, let me very careful this and we have a P&L for 376. But one of the things that I'm going to give you is that number one: you're going to want to cut losses quickly when you're trading options. Unlike with regular stocks, you're going to lose a lot more when you're trading options because of the fact that it's multiplied and having a set criteria to cut losses is all part of having a plan.

You create a plan for both your entry and your exit point specific point in time. Be that confirmation, whatever specific point in time where you're getting into a position and then even a specific point in time. or you get out of a position when I say specific point I don't mean like a specific actual time, but I mean a specific point in time where you have a certain criteria that has just been met. So when exiting positions, this could be price weakness.

It doesn't matter if you have a profit or a loss, if you're seeing a certain criteria of price, we can this be that a validation point or be that just rapid price weakness over the SMA line, then you may consider exiting out of a position. Those are just some examples. I have a ton of videos links below if you need more help with that. Okay, so what patterns types of stocks or opportunities do we need to be looking for when trading options in order to make $100 per day? Well, I Usually like to focus on low cap, high volatility stocks for my regular positions because of the simple fact that they have high volatility.

But since options allow us to multiply the movements of volatility, that means that we can focus on higher cap stocks that have less volatility, but are perhaps more consistent and a little bit more predictable for us. And the key with this is consistent. Consistency is key. If we could find higher cap stocks that have consistent movement intraday, but longer-term stability, we can lower our risk of losses, but also have lucrative opportunities.

For example, let's say we are looking at AMD and acknowledge a pattern of breaking above the long term SMA line and holding price strength above our blue short term SMA line. We can then take advantage of these positions. next time we see a conformation above our long term SMA line and our short term SMA line. and instead of buying shares, we could buy a lot or one contract and multiply our benefit from the little over a $1 of price action run-up.

Likewise, we can use a put option to multiply the same stocks. pattern of breaking down over a dollar after the run up and using a put option exposes us to bless risk than shorting because of the fact that you can't lose more than the cost of the contract versus with shorting You're hypothetically or theoretically I should say you're theoretically open to unlimited losses. The stock price can just go up exponentially, but of course there is more to making $100 per day consistently. When trading options, you're going to need to find stocks that have a pattern of running up cleanly over the and preferably at least a dollar or so so that it is easier to hit that $100 threshold if you were to just buy one lot.

And the key is focusing on taking a position upon confirmation and then holding into the price strength over the SMA line and closing at early warning. Signs of a reversal such as a validation point, or even a more aggressive exit point such as a reversal over our short-term SMA line. But again, with options, the notion of cutting losses quickly is ever so important. If it's losses or multiplied, it's going to be extremely important to trade like a spoiled brat.

Take only the best setups, get in, and get out. But anyways, folks, the key is finding opportunities, learning how to find opportunities, and then going and using a paper trading platform to practice trading and practice your skills. with these opportunities. and then of course, doing this consistently until you have the skills in place to consistently make money within the stock market.

And honestly, there's a ton of other ways to make money using options, so if you thought that this was valuable, let me know. and I'll make sure to make some more options videos in the future. And honestly, if you do need more help finding opportunities, there's no reason for you to go at it alone. We do have these Zip Traders Circle Facebook Group and discord chat.

You could check out the Zip Traders Circle Facebook Group by clicking the link below and join in the Facebook group. We also have a training tutorials playlist which you could access link below as well. Anyways, have a great day folks and I'll see you in the next video.