Call Options Explained: Understanding Short and Long Calls

Рет қаралды 15,774

Күн бұрын

In "Call Option Diagrams: Understanding Short and Long Calls," we delve deep into the complex world of call options. This video provides a clear, step-by-step explanation of how short and long call option payoff diagrams illustrate potential profit and loss scenarios. We demystify the intricacies of these essential trading strategies and guide you through their practical implications in the market. Whether you're a beginner or an experienced trader, this video equips you with the knowledge you need to understand and leverage both short and long call options effectively.
Chapters:
0:00 - Call options explained
0:58 - Long call options: Payoff Diagram
5:52 - Short call options: Payoff Diagram
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Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Пікірлер: 36

@RyanOConnellCFA Жыл бұрын

🎓 Tutor With Me: 1-On-1 Video Call Sessions Available ► Join me for personalized finance tutoring tailored to your goals: ryanoconnellfinance.com/finance-tutoring/ 📚 CFA Exam Prep Discount - AnalystPrep: ► Get 20% off CFA Level 1, 2, and 3 complete courses with promo code "RYAN20". Explore here: analystprep.com/shop/all-3-levels-of-the-cfa-exam-complete-course-by-analystprep/?ref=mgmymmr

@ahmedyoussef5708 2 ай бұрын

best video to explain options on youtube

@RyanOConnellCFA 2 ай бұрын

Thank you for that!

@joylee78 Ай бұрын

second that

@RyanOConnellCFA Ай бұрын

@@joylee78 Much appreciated!

@usha2007 4 ай бұрын

This was the best, simple, basic video! Thanks, was very helpful.

@RyanOConnellCFA 2 ай бұрын

It is my pleasure!

@krishiramsundar6153 8 ай бұрын

Thank you so much, just learning about options contracts in Uni and this really helped!

@RyanOConnellCFA 8 ай бұрын

Glad it was helpful! Thanks for the feedback

@manfulgloria4785 3 ай бұрын

Best explanation ever

@emmanuelgaima9440 6 ай бұрын

God bless you, bro. Needed this.

@RyanOConnellCFA 6 ай бұрын

My pleasure! Thank you

@majorboi8863 Ай бұрын

thanks man

@lolagarchette5570 2 ай бұрын

Best explanation, thanks!

@RyanOConnellCFA 2 ай бұрын

My pleasure!

@stayingclassy 2 ай бұрын

Great video! Helped a lot! What about strategies?

@victoricus1 Жыл бұрын

thank you, the explanation is very clear

@RyanOConnellCFA Жыл бұрын

Glad it was helpful! Its my pleasure

@aurinator 3 ай бұрын

So Covered Calls are Short Calls going by these definitions..? The way I learned to do the Wheel is sell Covered Calls when probability favors the underlying security appreciating in value, and Covered Puts when depreciation is favored viz. when you expect it to go down.

@cvbfghrtyu 6 ай бұрын

Thanks a lot for the video, I couldn’t get this topic when a uni professor explained, so I came here :) I have a small question. When we are talking about short call, what is the nature of the losses below zero: are they real losses (f.e. we need to pay someone) or that losses are like opportunity costs?

@RyanOConnellCFA 6 ай бұрын

It is my pleasure! In a short call option, losses below zero are real financial losses that you need to pay. For example, if you sold a call option for $5 with a strike price of $50, and the underlying stock price at expiration is $60, you're obligated to sell the stock at $50. This results in a loss of $10 per share (the difference between the market price and strike price), minus the $5 premium received, totaling a net loss of $5 per share.

@cvbfghrtyu 6 ай бұрын

Got it, thank you🙏🏻

@RyanOConnellCFA 6 ай бұрын

@@cvbfghrtyu My pleasure!

@riceballdonut847 4 ай бұрын

Thanks for the explanation. I have a quick question (sorry if it is stupid, Im new to this). Regarding Long Call Option profits, this is assuming the option is EXERCISED. So can we still profit if we sell the option at a higher strike price before expiration?

@RyanOConnellCFA 3 ай бұрын

Hi @riceballdonut847, that’s a great question and not stupid at all! Yes, you can definitely profit from a long call option by selling it before expiration if its market value has increased, regardless of the strike price. This is true for both American and European style options, though American options offer the additional flexibility of being exercisable at any time before expiration, potentially providing more opportunities to profit. Selling the option can capture the gain without needing to exercise it.

@bobirnasimov9421 3 ай бұрын

God damn, cant believe this is free. cant find it for money in my region)

@RyanOConnellCFA 2 ай бұрын

Glad to be of service!

@mohammedlayes9248 8 ай бұрын

Hello, thank you for this channel! Where do the words "long" and short" come from? I just don't understand why these words are used?

@RyanOConnellCFA 8 ай бұрын

The terms "long" and "short" in options trading originate from general investing terminology. When you're "long" on an asset, it means you've bought it with the expectation that its value will increase, similar to holding a stock or call option anticipating growth. Conversely, "shorting" implies you're betting against an asset, like when you sell a stock or call option you don't own, hoping to profit from its decline in value.

@mohammedlayes9248 8 ай бұрын

@@RyanOConnellCFA ..... Ahhhhhhhhhh!!! That makes sense!!! Really appreciate you time answering the question. Have a great day!

@RyanOConnellCFA 8 ай бұрын

@@mohammedlayes9248 Its my pleasure! You have a great day as well