Unrealistic dreams. Realistic position sizes.
Calls, puts, spreads, the Greeks and charting, one quarter at a time, so you know your stuff when the Seattle Yetis let you warm up courtside.
You are learning options so that one day you can sit courtside and warm up with the Seattle Yetis. Great plan. No jump shot required. Patience is mandatory.
Meet your mascot
Plays guitar between quarters, never skips a shootaround, and has one dream: to sit courtside and warm up with the team.
The Yeti's motto: unrealistic dreams, invested wisdom.
House rule
Practice with fake money in real markets until your process is boring and repeatable.
House rule
Every trade gets a dollar number for the worst case, written down in advance.
House rule
Size up only after months of consistent, small, defined-risk trades.
Coach's story
I'm from Baton Rouge, Louisiana, where opportunity was hard to come by. I make a good living managing risk in high-hazard environments, and that job taught me most of what I know about not getting hurt.
My trading itch started when my company's stock dropped to about $10 and then soared past $150 when it was bought. I thought, wow, I wish I knew how to invest. I had no idea where to start. I did the traditional things: grabbed my 401(k) match, bought life insurance, opened a little market account.
Then I found options and nerded out for hours watching trading educators. And I did all the things they said not to do. Over several years I lost almost $100k learning why. Then it came together: small size, defined risk, patience, and a written plan. I still work my day job and my account isn't big enough to replace my income yet, but I'm trending the right direction, and avoiding FOMO and sticking to the plan is why.
It's easier than ever to participate in the market now. I want to do it with my friends and turn our unrealistic dreams into real ones, and I want you to learn it without paying my tuition. This course is everything in my head, in order, with a few jokes. I'm still a goofball, and I think learning should be fun.
Unrealistic dreams. Invested wisdom. Thanks for being on the team.
The real game
Learning how options work is the easy part. Risk management, emotional control, putting time on your side, and making room to be wrong are where the money is made. Lots of people lose money to FOMO, and some treat the market like a casino, doubling down on a thesis until the account is gone. The market punishes greed: oversizing, chasing, and refusing to be wrong.
We don't outsmart the market. We wait until it gives us a favorable opportunity. That works the same whether you buy and hold stock or trade options, because it's always buyers and sellers.
And the first barrier is the belief that the market is for somebody else, for rich people. It isn't. The world's biggest companies are bought and sold there every day, and you can put your money to work there too. Stay humble, stay open to opportunity, dream big, invest wisely, and one day those dreams stop looking so crazy.
The Dream Meter
Set one and see what honest compounding asks of you.
That's what honest compounding asks. Shorten it by adding money, not by taking bigger swings.
This course is educational, not financial advice. Options can lose 100% of the premium you pay, and some strategies can lose more than you put in. Courtside seats are not guaranteed by this course. Neither are profits.
An option is a coupon for 100 shares. A call is a layaway plan for buying them. A put is a way to sell them at a price you locked in.
Right to buy
You pay a fee (the premium) for the right to buy 100 shares at the strike price before expiration. You want the stock to rise.
Right to sell
You pay a premium for the right to sell 100 shares at the strike. You want the stock to fall, or you want insurance on shares you own.
The price on your ticket.
Game day. After it, the option is exercised or worthless.
The ticket price, quoted per share. $2.50 means $250 per contract.
ITM has intrinsic value. OTM is all hope and time.
Most traders sell to close (or buy to close) before expiration to lock in a gain or cut a loss. This is the normal way out.
Out of the money, it expires worthless. Buyers lose the premium, sellers keep it.
In the money at expiration, shares may change hands. Sellers get assigned. Beginners usually close first to avoid surprises.
Bullish
Risk: the premium. Reward: big if the stock rises past strike plus premium.
Neutral to bearish
Collect premium. Naked, the risk is unlimited, so beginners should skip it.
Bearish or hedge
Risk: the premium. Reward grows as the stock falls.
Neutral to bullish
Collect premium. You may have to buy the stock at the strike, so only on stocks you want to own, with the cash set aside.
A call costs $2.50. What do you actually pay?
$250. Premiums are quoted per share and one contract covers 100 shares.
You own 100 shares and you're nervous about a drop. Buy or sell, call or put?
Buy a put. That's insurance on shares you already own — the protection plan at checkout.
Which of the four positions should a beginner skip, and why?
Selling a naked call. The risk is unlimited, because there's no ceiling on how high a stock can go.
Team defense for your trades. A spread buys one option and sells another, so the sold option pays for part of the bought one and caps the damage.
Debit spread
Max loss is what you paid. Max profit is the width between strikes minus the debit.
Credit spread
Max profit is the credit. Max loss is the width minus the credit. You win if the stock stays away from your short strike.
You sell a $5 wide put credit spread for $1.50. What's the most you can lose?
$350. Width ($5) minus the credit ($1.50) is $3.50 per share, times 100.
On a credit spread, what has to happen for you to keep the whole credit?
The stock has to stay away from your short strike through expiration.
The stat sheet for any option. Five numbers that tell you how it behaves when the stock moves, time passes, or the crowd gets loud.
Delta
If the stock moves $1, the option moves about delta dollars. A 0.50 call gains about 50 cents. Also a rough guess at the odds of finishing in the money.
Gamma
How quickly delta changes. Highest for at-the-money options near expiration: great for buyers, spicy for sellers.
Theta
Dollars of value lost per day if nothing else changes. Buyers fight it. Sellers collect it. It speeds up in the last month.
Vega
Options get pricier when the market expects big moves (high implied volatility) and cheaper when it calms down.
Rho
Sensitivity to interest rates. For the 30 to 60 day trades in this course you can mostly ignore it.
Combining
A spread's Greeks are the long leg plus the short leg. A bull put spread has a small positive net delta and positive theta: it gains a little from time passing.
Context
IV rank compares today's implied volatility with its past year. High rank: options are rich, so spreads that sell premium are favored. Low rank: options are cheap, so spreads that buy are fairer.
Your call has a 0.40 delta. The stock goes up $2. Roughly what happened to your option?
It gained about 80 cents per share, so about $80 on one contract — before theta and any volatility change.
Which Greek is the reason you can be right about direction and still lose?
Theta, usually — time decay. Vega gets the blame too, especially right after earnings.
Read the film before you take the shot. One practice chart, five tools: candles, moving averages, Bollinger Bands, RSI and Fibonacci.
Why look at the weekly chart before the daily?
The weekly tells you which way the river flows. A bullish daily setup inside a falling weekly trend is swimming upstream.
You know the pieces. Now learn to read the menu (the options chain), pick an expiration and strikes, and manage the trade after you click.
A chain lists every strike for one expiration. Calls on the left, puts on the right, strikes in the middle.
You sell at the bid and buy at the ask. The gap between them is a hidden cost. A wide gap means thin trading: skip it or shop elsewhere.
The halfway point. Start limit orders near the mid and move a nickel at a time. Never use market orders on options.
Volume is contracts traded today. Open interest is contracts still open. Look for hundreds or thousands, not single digits.
Your strike picker. Higher delta means more likely to finish in the money and a pricier option.
| Days out | Feels like | Watch out |
|---|---|---|
| 0 to 14 | A sprint | Gamma and theta are brutal. Almost no time to be right. Experts only. |
| 30 to 60 | The sweet spot | Time decay is steady, you have room to be wrong, and spreads price sensibly. |
| 90 and up | A marathon | Costs more and ties up money, but time decay is slow. |
| Trade | Typical delta zone | Why |
|---|---|---|
| Credit spread, short strike | About 0.15 to 0.30 | Lower delta means a lower chance of finishing in the money, with a smaller credit. |
| Debit spread, long strike | About 0.55 to 0.70 | Behaves more like the stock, so you pay less to time decay. |
| Debit spread, short strike | About 0.25 to 0.35 | Sells the hopeful part of the move to help pay for the long leg. |
These are starting guidelines, not rules. Pair them with chart levels: put short strikes beyond support or resistance.
A common credit-spread rule is to close at about 50% of the max profit. The last half of the profit carries most of the risk.
Decide before entry: for example, close if the spread costs twice the credit to buy back. Write it on the card.
Inside about 21 days, close or roll. Near expiration, assignment risk and price pinning make short options unpredictable.
Closing and reopening later is a fresh decision with its own max loss. It is not a way to erase a loss.
Why never use a market order on an option?
The spread between bid and ask can be wide, and a market order pays whatever's there. Start at the mid and move a nickel at a time.
You're up 50% on a credit spread with 25 days left. What does the house rule say?
Close it. The last half of the profit carries most of the risk.
Overtime is where accounts get saved or lost. Size small, trade with the higher time frame, use spreads to cap damage, and buy stock on sale.
Rule one
Losing streak simulator
Portfolio rule
Many traders keep the combined max loss of all open trades near 5 to 6% of the account. Trades in the same sector often move together, so count them as one bigger bet.
Rule two
Zoom out before you zoom in. The weekly chart tells you which way the river flows. The daily chart tells you where to step in. A bullish daily setup inside a falling weekly trend is swimming upstream.
Weekly / monthly: which way is the trend?
Daily: where is the entry zone? (moving average, Fib zone, RSI cooled)
Order: limit price and timing
Rule three
Same opinion, very different downside. Illustrative numbers on HOOP at $100, 30 days out.
| Trade | Credit | Max loss | Cash tied up |
|---|---|---|---|
| Naked short $95 put | $160 | $9,340 | $9,500 |
| $95 / $90 put credit spread | $105 | $395 | $500 |
Both profit if HOOP stays above $95. The spread keeps less premium and risks about 4% as much.
Rule four
Selling a cash-secured put is a limit order that pays you to wait. If you are assigned, you own shares at a lower effective cost. Then covered calls can lower it more. This loop is called the Wheel.
The Wheel is not risk free. If the stock collapses you still own it. Only wheel stocks you would hold through a drop, with the full cash set aside.
$10,000 account, 1% risk, a spread with $350 max loss. How many contracts?
Zero. 1% of $10,000 is $100, and one contract risks $350. Either find a narrower spread or wait. Sizing is not a suggestion.
Why count two trades in the same sector as one bet?
They tend to move together, so a bad day hits both at once. Your real risk is the sum, not the average.
Eight game situations. Pick your play, then read the breakdown for every option.
Pick your play first, then read the breakdown on every option. Nobody's keeping score — being wrong in here is free.
Tap a card to flip it. Drill the ones that don't come instantly.
Log a trade, download a Yeti trade card, then come back later, re-upload the card, add the result and save it to your notebook. The data is hidden inside the card image, so it is the only file you need to keep.
Knowledge becomes skill with reps. The next move is a brokerage account with paper trading turned on. Real market prices, fake money, real lessons.
Pick a regulated broker that offers paper trading and options. Check FINRA BrokerCheck, confirm SIPC membership, and read the options risk disclosure your broker provides. Options approval levels vary by broker, and spreads usually need a higher level than buying calls and puts.
Tools
Use the Locker Room journal for each paper trade: download the card, close it out later, and keep your notebook. Twenty logged trades teach more than twenty thousand words.
Graduation
Finish the stops, put your name on the ticket, and take your seat.
Warm-up access · admit one wise trader
Section: Courtside. Row: Shootaround. Shooting form not included. Signed, the Yeti.
A keepsake from a fictional team. Not a real ticket.
Unrealistic dreams. Invested wisdom. See you at the shootaround, Seattle.