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Course Content
Options Fundamentals
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Call and Put Options Explained
Options Pricing and Greeks
Exercise and Assignment Process
Basic Options Strategies
In 2026, the most successful retail traders have moved away from "gambling" on high-leverage options and instead use Basic Options Strategies to create consistent cash flow and protect their existing portfolios.Here are the four essential strategies that form the foundation of a professional options toolkit.1. Covered Call (The Income Generator)This is the most popular strategy in 2026 for long-term investors. You sell a call option against shares you already own.Setup: Own 100 shares of a stock + Sell 1 Out-of-the-Money (OTM) Call.The Goal: To collect the Premium (cash) from the buyer while waiting for the stock to rise.The Outcome:Stock stays flat/down: You keep the shares and the cash.Stock hits the Strike: you sell your shares at a profit and keep the cash.Best For: Generating "synthetic dividends" on stocks you plan to hold anyway.2. Cash-Secured Put (The "Buy at a Discount" Strategy)Instead of buying a stock at the current market price, you get paid to wait for a better price.Setup: Have enough cash to buy 100 shares + Sell 1 OTM Put.The Goal: To get paid a premium to commit to buying a stock at a lower price (Strike Price).The Outcome:Stock stays above Strike: You keep the cash and try again next week.Stock drops below Strike: You are "assigned" the shares at the lower price you wanted, and your effective cost is even lower because of the premium you kept.3. Long Call & Long Put (The Directional Bets)These are the simplest forms of options trading, used to profit from a specific price move without owning the underlying asset.Long Call: You buy a call because you believe the price will go up significantly. It offers unlimited profit potential with limited risk (the premium paid).Long Put: You buy a put because you believe the price will go down. This is often used as "Insurance" to protect a portfolio during a market crash.4. Strategy Comparison TableStrategyMarket SentimentPrimary GoalRisk ProfileCovered CallNeutral to Slightly BullishIncome GenerationMedium (Stock can still fall)Cash-Secured PutNeutral to Slightly BullishBuy Stock CheaperMedium (Stock can still fall)Long CallAggressively BullishLeverage / ProfitLow (Only lose premium)Long PutAggressively BearishProfit / ProtectionLow (Only lose premium)5. The "Wheel" Strategy (The 2026 Professional Workflow)Many 2026 traders combine these into a cycle known as The Wheel:Sell Cash-Secured Puts until you are assigned shares.Once you own the shares, sell Covered Calls until the shares are called away.Repeat. This allows you to collect premiums at every stage of the market cycle.2026 Tactical Note: In today's high-volatility environment, professional traders typically look for 30–45 Days to Expiration (DTE). This provides the best balance between capturing Theta (Time Decay) and giving the trade enough time to work.💡 Student ExercisePick a "Blue Chip" stock (like Apple or Tesla). Look at the options chain for 30 days from now.How much cash would you receive today for selling a Covered Call 5% above the current price?If you did this every month, what would your "annual yield" be from premiums alone?
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Covered Calls and Cash-Secured Puts
Long Calls and Puts
Options vs Stock Trading
Advanced Strategy Combinations
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Spreads and Straddles
Iron Condors and Butterflies
Calendar and Diagonal Spreads
Risk Management and Psychology
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Position Sizing for Options
Managing Winners and Losers
Avoiding Common Options Mistakes
Course Overview: Options Trading Masterclass

In 2026, Spreads and Straddles represent the transition from “betting” to “structuring.” Instead of just picking a direction, these multi-leg strategies allow you to trade based on probability and volatility.

1. Vertical Spreads: Defining Your Risk

A vertical spread involves buying and selling options of the same type (Calls or Puts) and expiration, but at different strike prices. This is the most common way 2026 traders reduce the cost of a trade.

Bull Call Spread (Debit Spread)

  • The Goal: Profit from a moderate price increase while lowering the cost of entry.

  • The Setup: Buy a Call at a lower strike + Sell a Call at a higher strike.

  • The Benefit: The premium you collect from the sold call “subsidizes” the call you bought.

  • The Trade-off: Your maximum profit is capped at the higher strike price.

Bear Put Spread (Debit Spread)

  • The Goal: Profit from a price decrease at a lower cost than buying a single put.

  • The Setup: Buy a Put at a higher strike + Sell a Put at a lower strike.

2. Straddles: Trading Volatility, Not Direction

A Straddle is a unique 2026 favorite for “Event Trading” (Earnings, Fed announcements, or major Tech launches). You don’t care which way the price goes; you just need it to move violently.

  • The Setup: Buy 1 Call + Buy 1 Put (both at the same strike and expiration).

  • The Goal: To profit from a massive swing in either direction.

  • The Risk: If the stock stays flat (sideways), you lose the premium on both options. This is known as “Theta decay” eating your position from both sides.

3. Comparison Table: Strategy Utility

Strategy Market View Primary Advantage Main Risk
Bull Call Spread Moderately Bullish Lower cost than a Long Call. Capped potential profit.
Bear Put Spread Moderately Bearish Lower cost than a Long Put. Capped potential profit.
Long Straddle Highly Volatile Profit from moves in either direction. Massive “Theta” (time) decay.
Short Straddle Neutral/Flat Profit from the market doing nothing. Theoretically unlimited risk.

4. When to Use Which? (2026 Pro Logic)

  • Use Spreads when you have a price target. If you think a stock will go from $100 to $110, don’t just buy a call; sell the $115 call to lower your cost. It’s “smarter” money management.

  • Use Straddles when you expect a “Big Bang” event but aren’t sure of the sentiment.

    • Warning: In 2026, “Implied Volatility (IV) Crush” is a common trap. If you buy a straddle right before earnings, the post-event drop in IV might make both options lose value even if the stock moves.

5. Summary: Multi-Leg Mastery

The jump from single options to Spreads and Straddles is about Risk-Reward Ratios.

  1. Spreads = Controlled leverage and lower cost.

  2. Straddles = Pure volatility plays.

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