1. WOW12 – Basic Options Strategies (Capstone) – Ask any question options
Presented by: Georgio Stoev
December 3, 2018

2. Important Information- Saxo Bank
Educational Purposes: The material is provided for informational and educational purposes only and no information contained herein constitutes a solicitation for the purpose of purchase or sale of any commodity, security or investment, nor should it serve as the basis for any investment decision. The Saxo Bank Group does not guarantee the accuracy or completeness of any information or analysis supplied. The Saxo Bank Group accepts no responsibility or liability for the contents of any other site, whether linked to this site or not, or any consequences from your acting upon the contents of another site.
No Guarantee: The contents of this publication should not be construed as an express or implied promise, guarantee or implication by the Saxo Bank Group that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated. Neither Saxo Bank A/S or its officers, employees, representatives, agents or independent contractors are in such capacities financial adviser. Saxo Bank A/S does not provide investment or financial advice or make investment recommendations.
Trading Involves Risk: Trading options can be very speculative and may result in losses as well as profits. You should carefully consider your financial situation and consult your financial advisors as to the suitability of your situation prior to making any investment or entering into any transactions.
This disclaimer is subject to Saxo Bank Group's Full Disclaimer available at

3. Today’s Agenda Review of existing positions/watchlist
Review of basic option strategies
Specific examples of the above strategies
Misconceptions/Questions

4. Review of the positions/watchlist
What is the trend of markets/sector/stock?
Determine your market outlook based on the above assumption
Beware of trading against the trend
Review existing position on options, stop losses if any.

5. Review of strategies (Long Call)
Long Call - a call buyer is definitely bullish in the near-term
Maximum loss – limited to premium paid
Maximum gain – unlimited
Breakeven (expiration) strike price + premium paid
Be aware of time decay/earnings
No assignment risk
Close well before expiration

6. Review of Strategies (Long Put)
Long Put - a bearish strategy profiting from fall in stock price
Maximum loss – limited to the amount of premium paid
Maximum gain – limited but substantial
Breakeven = strike price – premium, at expiration
Be aware of time decay and announcements
Close before expiration (2-3 weeks)

7. Review of Strategies (Cash-Secured Put)
Outlook- short term dip in the stock price, followed by long-term appreciation
Substitute to an outright stock purchase
Maximum gain – is limited to the premium paid
Maximum loss – is limited but could be substantial
Breakeven = strike price - premium
More appropriate for investors that want to own the underlying
Time Value (+)

8. Review of Strategies (Covered Call)
Outlook – mildly bullish to neutral on a stock you own or you want to own
Earn premium without additional risk
Maximum loss is limited but could be substantial if stock becomes worthless
Maximum gain is capped to the strike price sold
Breakeven = stock price – premium
Strategy maybe viewed as partial stock hedge or a good exit strategy
Best case outcome is to be called out

9. Review of Strategies (Collar)
Outlook – investor is looking for a slight rise in stock but is worried about a decline
Hedging strategy
Maximum loss is limited (for the maturity of the collar)
Maximum gain is capped to the short call strike price
Breakeven doesn’t really apply
Good strategy to use when uncertainties increase in the market (earnings, announcements and so on)

10. Things to Avoid Trading without a plan
Setting unrealistic expectations
Cutting profits short and letting losers run
Impatience, which could lead to overtrading
Improper position sizing
Diversify across sectors, industries and markets
Poor risk management
Timing tops/bottoms
Trading against the trend
Too focused on being right

11. Moving forward Test the strategies in simulation environment first
Create rules around the strategies (review past webinars)
Keep a watchlist of bearish and bullish stocks/ETFs
Keep a journal of your trades (wins/losses)
Have fun with learning options strategies (
Resume back on January 13th with Spread Trading
Happy and safe holidays!