Max Risk

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Premium Pricing

Option premium pricing is extremely complex algorithm and you are not going to understand it. So I am going to explain in the simplest way possible. There are 6 factors which effect option premium: Underlying Price Contract Strike Price Contract Expiration Date Interest Rate Dividends Volatility I will not dive into these but you can […]

Contracts Explained

Options 101 Trading options contracts is essentially leveraged trading. To trade 100 shares of AAPL with an average share price of $150, it would cost $15,000.  1 options contracts gives you the right to buy 100 shares for a premium per share.  Premium on an AAPL contract may be $3.00 per share. Therefore, you only have […]

Pareto Principle

Per Investopedia, The 80-20 rule, also known as the Pareto Principle, is an aphorism which asserts that 80% of outcomes (or outputs) result from 20% of all causes (or inputs) for any given event. The biggest problem facing losing traders is that 80% of their losses come from 20% of their trades. Or they often lose […]

Your Own Scalable Business

In the previous segment I mentioned trading as a business, an extremely scalable business. You should treat it as that.  Trading is not: Entertainment Thrilling Video game Exciting FUN A hobby Trading is: Your job Your business Your livelihood Your freedom   If you treat trading as a hobby, gambling, or your adrenaline, thrill seeking […]