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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 the 2026 market, your success isn’t determined by your entry—it’s determined by your exit. Most traders fail because they “hope” their losers will turn around and “fear” their winners will disappear.

Professional management means replacing emotion with mathematical triggers.

1. Managing Winners (Taking Profit)

The goal is to capture profit before the market reverses or Theta (Time Decay) stops working in your favor.

  • The “50% Rule” for Credit Spreads/Sellers: If you sold an option for $2.00 and it is now worth $1.00, you have captured 50% of the maximum profit. In 2026, the standard practice is to close the trade and move on. The risk-to-reward ratio for the remaining 50% is rarely worth it.

  • The “Double the Premium” for Long Calls/Puts: For directional bets, many pros set a “Take Profit” (TP) at 100% gain.

  • Trailing Stops: If a stock is in a strong trend, use a trailing stop (e.g., 20% below the current peak) to let your winner “run” while protecting the bulk of your gains.

2. Managing Losers (Mitigating Damage)

In 2026, “HODLing” an option is a recipe for disaster. Unlike stocks, options have an expiration date; they don’t have time to “wait for a recovery.”

  • The “Hard Stop”: Decide your maximum loss before you enter. Common triggers include:

    • Price-based: Close if the stock hits a certain technical support/resistance.

    • Premium-based: Close if the option loses 50% of its initial value.

  • The “21-Day Rule”: If you are an option seller and the trade hasn’t gone your way, close or “roll” the position at 21 Days to Expiration (DTE). After this point, Gamma risk becomes too high—one small move in the stock can cause a massive, unpredictable swing in the option’s price.

3. The Art of “Rolling”

“Rolling” is a professional technique used to buy more time or adjust your strike price. It involves closing your current position and opening a new one in a later expiration cycle.

  • Rolling for Credit: Never roll for a “Debit” (paying more money to stay in a losing trade). Only roll if you can collect more premium, which further lowers your cost basis.

  • Rolling Up/Down: If a stock moves against your Iron Condor, roll the “untested” side closer to the stock price to collect more credit and offset the loss on the “tested” side.

4. Management Summary Table (2026 Standards)

Trade Type Profit Target Stop Loss Action at 21 DTE
Credit Spreads 50% of Max Profit 2x the Credit Received Close or Roll
Long Calls/Puts 50% – 100% Gain 50% of Premium Paid Close (Avoid expiration)
Iron Condors 25% – 50% of Max Profit 2x the Credit Received Close or Roll
Covered Calls 50% – 80% of Premium Technical Breakout Roll out and up

5. The 2026 “Trade Journal” Requirement

You cannot manage what you do not measure. In 2026, use an automated journal to track your “Exit Reason.” * Did you close because of a Technical Trigger?

  • Or did you close because of Fear?

    If your journal shows you consistently exit early out of fear, your Position Sizing is likely too large.

💡 Tactical Exercise

Look at your current open positions. For each one, write down:

  1. The exact price where you will Take Profit.

  2. The exact price where you will Cut Losses.

    If you can’t answer both immediately, you aren’t trading—you’re gambling.

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