When I first heard about options, I wasn’t sure if I would, or could, use them. It can be scary to learn something new about money that seems so highbrow and sophisticated.
I decided that I was not able to decide if should use them until I understood them, at least on a basic level. This may be the main reason it is hard to convince someone to follow my lead, although I am trying to do the legwork for you, that would require trust. – It is good practice, I have found, to not trust many people’s advice when it comes to money, so good job! –
If you choose not to trust, and to learn it yourself, then good job! I will try to help you on your journey.
While it is always best to have a thorough understanding of complex subjects, I personally rely upon visuals to memorize facts, like a blueprint to follow – a guide. If you don’t know what I mean, take for example my experience in college trigonometry. I never fully grasped the concept of sin, cos, nor tan; I simply memorized the formulas to get the correct answers on the test. I visualized the triangle in the textbook with the hypotenuse, adjacent, and the opposite sides, then I physically used my fingers on the desk to remember the pattern. It works, and I got good grades, but we can do better through understanding and good teaching.
While calls and puts are opposites, they are not the 2 sides to a contract. In this understanding we can separate them in our learning completely.
First we deal with understanding calls, then we talk about puts.
Visualize a coin, and its 2 sides. The “call coin” has 2 sides, and the “put coin” has 2 sides. Now you should be grateful, because a very complex and hard-to-understand concept would feel like handful of dimes, nickels, pennies, and quarters, but you just have 1 “call coin” in your hand; put the “put coin” in your pocket for later.
The 2 sides of the coins are the 2 sides of any transaction, you already know what those are… buy, and sell.
And go ahead, take a break, remember those things and we will make some money later.
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–KEN
The Option to Sell 