Short, Authoritative, Useful eBooks

Short, Authoritative, Useful eBooks

Learn About Options Trading (Practice) in 50 Minutes

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Words: 11,639

Published: 18 December 2023



Short Description:

Learn About Options Trading (Practice) in 50 Minutes introduces assets with options on them, simple options strategies, trade planning, and trading psychology, and The Thinking Trader Process.

Options are complicated financial instruments; there is a lot of ground to cover to understand, first, just how options work (Theory 1); second, understand all the strategies possible with options (Theory 2); third, understand and internalise the planning and psychology involved in becoming a successful trader (Practice 1); and fourth, understand and internalise the trading preparation process (Practice 2).

Here is a roadmap of what you will need to understand about options trading at some point or other:

Introduction to Options
  • Call & Put Basics
  • The Advantages and Disadvantages of Options
  • Option Moneyness, Value, and Pricing
  • Six Basic Risk Graphs
  • Expiration, Exercise, and Assignment
  • Time Decay, Volatility, and the Greeks
Assets to Trade
  • Equity, ETF, and Index Options
  • Regular, Weekly, Quarterly, and LEAP Options
  • Exchanges and Trading Hours
  • Portfolio Investing
Strategies, Trade Planning, and Trading Psychology
  • Options Strategies
  • Trade Planning
  • Trading Psychology
  • The Thinking Trader Process


This eBook covers Assets to Trade; Strategies, Trade Planning, and Trading Psychology; and Preparation The first eBook in the series—Learn About Options Trading (Theory) in 40 Minutes—covers ‘Introduction to Options’.

Table of Contents:


Options strategies have been designed to profit from almost any market condition of the underlying asset (see the image below).

These market conditions include trending (rising price trends or falling price trends) and ranging (consolidation, range-bound, sideway) price movements; the amount and speed of price change (volatility) and the resulting pricing of this volatility into the price of the underlying’s options; and the effects of time-decay.

(At some point in our options-education journey we will come across one of the most commonly-cited reasons for trading options: the ability to make profits in sideway-trading markets.)

Keeping in mind the trading / investing maxim ‘Buy Low and Sell High’, note that in options trading we can profit by:

  1. Buying premiums when they are low and selling them when they are high;
  2. Buying IV when it is low and selling IV when it is high;
  3. ‘Selling’ time-value decay.


Here we introduce some of the simpler options trading strategies. (Only a few, actually; including sub-species there are probably more than a hundred strategies available.) Study these strategies in detail, from various perspectives: they are essential for understanding how options are used for profiting from the markets; some are the building blocks of more advanced strategies; and we will be using several ourselves.

About The Author:

Thomas Saw

Thomas Saw is a passionate trader and educator. He has more than 20 years of experience successfully trading and investing in commodities, ETFs, options, forex, futures, and stocks, and has been actively sharing with fellow traders and investors the realities and practicalities of trading-investing as a means to financial freedom.

He is the creator of the FixedCaptialRisk portfolio system. His favourite instrument is options, because of the risk management, leverage and versatility they provide. His holistic approach to trading-investing is to use multiple different financial instruments and methodologies to achieve one’s financial goals within one’s own risk.

Thomas’s passion has led him to be:

  • Founder (2010-current), Traders Round Table, a community of traders and investors;
  • Founder & Owner (2007-2009), The Online Trading Academy, Singapore (World’s largest financial education franchise with 31 schools);
  • President (2005-2007), The Options Traders Club of Singapore (a non-profit trading club).


Michael Chua is a student of Thomas and a trainer at TRT Academy.


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