Foundational Understanding of Options Trading

This ebook covers the basics of options trading combined with basic technical analysis discussed in my Foundational Understanding of Investing and Trading guide.

Introduction to Options

I introduce you to Options Trading by covering the basics.  I explain what options are, the two types of options, the two types of contracts, and the reason why options were created.  I also provide a brief history on where options came from. By the end of this section you will have a good understanding of what a call option and a put option is.

Options components

The components that make up options contract for both calls and puts are covered in this guide.  Which includes the options strike price, premium for the cost of the option, and the expiration date.  I also cover the time and intrinsic value that determines options pricing.  You will learn the difference between in the money, at the money, and out of the money options.  Most importantly you will learn how to read an options chain and the amount of open interest.  Lastly for this section I cover the options greeks, implied volatility, and how to select your option with the least amount of risk.

Call Option Strategies

With a good understanding of the basics you now can apply this to technical analysis and know when to enter trades using call options.  I cover uptrends and bullish chart patterns, which include double bottom, inverse head and shoulders, cup and handle, and the bull flag pattern.

Put Option Strategies

For put options you now can apply this to technical analysis and know when to enter trades as well.  I cover downtrends and bearish chart patterns, which include double top, head and shoulders, and the bear flag pattern.  Plus so much more.