SYLLABUS

Click here to download the WDIS: Options 101 Syllabus

Dr. Jim starts off the show by handing Brittany the "mic" to explain what they did with her short vertical call spread in CMG (for which she is bearish in) in order for her to get filled. They tried to get the position filled at 1.84 though had to move the pricing down a few pennies to 1.80. Brittany learned that this process is called "price discovery". Next, she explained her homework from the night before (remembering that she was filled in CMG at 1.80 for 425/430 short call spread) which was to explain her max gain/max loss on the trade and why. She dropped the mic on Dr. Jim and her homework and completely nailed it.

With that out of the way, before they jumped into probabilities, they needed to handle closing her "winning" vertical put spread (for which she is bullish) in NFLX. She learns that in order to close the trade prior to expiration all she needs to do is take on an equal and opposite position. She also learned the idea of trade management the tastylive way…manage winners and let your losers go, whereas the rest of the industry does the exact opposite. The two did just that in the tastytrade platform with her winning NFLX position where she came out with a profit of $27.00.

In the last few minutes of the segment, Brittany begins to learn that prices in the market tend to obey the properties of the normal distribution. Tomorrow, she will learn some more fun stuff about probabilities to prepare her for her second quiz!