New to Trading Options? Start Here - Your Ultimate Beginners' Guide

[00:00:00]everyone, and thank you for taking your lunch time today to join our options webinar.

[00:00:04]My name is Shawn, a dealer here in Longbridge, Singapore, and during this session I'll be walking you through the basic concepts of option trading. So, I mean, many investors hears about options and immediately think they are extremely risky or only meant for professionals.

[00:00:20]But, in reality, actually options are simple are simply just financial tools for investors to utilize. And just like any other tool, whether is it risky depends on how you utilize it. So, to this session is designed for beginners, so you don't have to worry if you have never traded an option before. By the end of this webinar, I hope you will understand the basics and also know how to how also know how options can actually complement your investment strategy.

[00:00:48]Yep.

[00:00:49]So, before we begin, I'd like to quickly highlight that today's webinar is purely for educational purposes. Nothing to Nothing discussed today should be considered an investment advice or recommendations to buy or sell any securities. So, every investment also carry risk, and everyone has different financial goals and risk tolerance. So, always conduct your own research before making any investment decision. So, without further ado, let's kick start with the agenda for today.

[00:01:19]So, here's what I'll be covering for today.

[00:01:22]First, we'll understand on what options actually are. Then, we'll look at the key difference between what's a call option and a put option. Followed by some key terminologies or jargons that are used in option tradings.

[00:01:36]Then, after that, we'll walk through several examples to help you understand the profit, loss, and also the break-even points in option tradings.

[00:01:45]And I'll also demonstrate how to trade option directly on our Longbridge mobile applications for newer investors that that have just downloaded our mobile applications.

[00:01:57]We'll then also look at two commonly used strategies such as the cash secured put and also the covered call that many long-term investors still use as well.

[00:02:06]Towards the end, uh, we'll also discuss on some key risks uh, to look out for when trading options and also some practical use cases for option trading before we end it off with the usual Q&A.

[00:02:18]So, yeah. Uh, let's start with the most basic question. What exactly is an option?

[00:02:24]Uh, an option is simply a contract uh, which gives the buyer the right but not the obligation to either buy or sell a stock at a predetermined price uh, before a certain expiry date. Notice I said the right but not the obligation.

[00:02:37]Uh, that's one of the biggest difference like between options and buying shares.

[00:02:41]When you're buying shares, uh, you already have committed your capital but when you're buying an option, uh, you're paying uh, for a choice because you may choose to exercise that right. So, selling an option before expiry uh, you're also able to sell the option before expiry or allow it to expire worthless.

[00:02:59]Okay?

[00:03:00]Uh, option may be used for several purposes. So, maybe firstly uh, they may be used to gain market exposure like maybe perhaps someone who expects a stocks to uh, rise or something like that. Then they may choose to purchase a call option instead of buying the shares directly. Then while the second uh, functionality would be options may be used for portfolio protection. For example, if an investor who owns a share may purchase a put option to reduce the impact of a significant uh, price decline in future.

[00:03:32]Then lastly, I mean options can also be used to generate a premium income. A steady stream of income for strategies such as a covered call which I'll be sharing later as well as the cash secured put which are commonly associated with premium collection.

[00:03:47]However, I mean one misconception I'd like to address is that options should not be viewed as a guaranteed income product or the get rich uh quick uh scheme, uh I would say. Because, I mean, options are leverage product. Uh this would mean that uh with a relatively small amount of capital uh that uh you are that you provide uh can actually have a larger exposure for the underlying position. So, this can be a double-edged sword, for investors.

[00:04:15]Right?

[00:04:17]So, now let's understand the difference between the call option and the put option. First, uh we'll begin with the call option.

[00:04:24]A call option gives the buyers the right to purchase the underlying shares at a specific uh strike price. So, a call buyer generally expects the share price to increase, uh.

[00:04:33]So, for example, imagine a stock is currently trading at $100. You believe that it may rise to significantly over the months. So, in instead of immediately buying 100 shares, uh you could purchase a call option with a strike price of $105.

[00:04:48]So, what does that mean is if the share price subsequently rise to $120, by holding on to this uh call option, uh you have the right to purchase the shares at 105. So, this call option becomes a valuable uh asset to you.

[00:05:04]While a put option, on the other hand, uh looks in the opposite direction. A put option gives the buyer the right to sell the underlying uh shares at a specific uh strike price.

[00:05:15]So, a put buyer generally expect uh or the vice versa, expect the share price to decline or maybe using the put as a protection for the shares that they already own. So, one example would be supposedly own a stock uh that is currently trading at $100, and uh you foresee that uh you believe that the stock price may uh decline in the future. So, you purchase a put option with a strike price, say for example, $95.

[00:05:43]So, if in the event that the share price falls to $80, then uh this put option that you've purchased gives you the right to sell at the $95 strike price.

[00:05:53]So, this put option becomes valuable if the current share price drops below your $95.

[00:05:59]So, I mean, a simple way to remember the difference is a call option is generally associated with the expectation that the market will go up, while a put option is generally associated with the expectation that the market will go down or we also use it as a protection against a decline in share price.

[00:06:18]However, I mean, we should also remember that every option contract involves two parties, a buyer and a seller. So, the buyer receives the right and pays the premium.

[00:06:28]Whereas the seller receives the premium, but takes on the obligation. So, when I mean obligation means that they must fulfill their obligation I mean, they have to fulfill the promise to the buyer.

[00:06:40]So, this difference between a right and an obligation is a fundamental understanding for options trading. So, one thing I'd like everyone to remember, buying call does not automatically means that you must eventually buy the shares.

[00:06:54]So, most option traders simply buy and sell the option contract itself before the expiry date. So, I mean, you might hear like "Oh, what's expiry date?" I'll share on in the following slides.

[00:07:06]Right?

[00:07:07]So, now let's go through with some important terminologies for option trading. So, firstly, we have contract size. So, one option contract represents 100 shares.

[00:07:18]This is probably the first thing every beginner should remember. If you purchase one option contract, you're actually controlling 100 shares. So, this also explains why the premium in term uh This also explains why the premium uh uh which is a term that we use in option trading, which I'll run through later in a while, is also multiplied by 100.

[00:07:39]So, next will be strike price.

[00:07:42]Uh this strike price is simply the agreed transaction price. So I mean you can think of it as the locking you're locking in the a future buying or selling price today. So basically that's the strike strike price in option trading.

[00:07:56]Yeah.

[00:07:58]Next would be expiry date. So every option has an expiry unlike stocks. So options contract does not last forever.

[00:08:07]So in the event if you do nothing Let's say for example you purchase an option already and you do nothing eventually the option will expire.

[00:08:15]So that you have to take note as compared to stocks whereas you can just hold it hold on forever. Whereas there's expiry date for option contracts.

[00:08:25]Then next would be premiums which I've mentioned earlier. Premium is simply the cost of buying the option. So if you are the seller then this becomes the income that you receive. So you can just remember it as if you're the buyer then you pay the premium. Then if you're the seller then you collect the premium for an option contract. Yeah.

[00:08:47]All right. So now we are looking at two terms that appears very frequently in option tradings.

[00:08:53]In the money ITM or out the money OTM.

[00:08:56]So I mean for a call option the option is in the money when it is is termed as in the money when the current share price is above the strike price. So I mean one example would be if let's say for example Apple is trading at 110 now.

[00:09:12]If I own a call if I own a call with a strike of $100 then this call option will entitle me to buy give me the rights to buy the Apple shares at $100 while the market is trading at 110. So therefore this call option is valuable and therefore it is known as in the money.

[00:09:35]Now let's reverse the situation and says that if my strike price is $120 then I mean this call option gives me the rights to buy at $120.

[00:09:45]But I mean if the share price is currently trading at 110 then why would I buy why would I exercise my call option to buy it at 120 when I can just purchase it from the market at 110. So I mean I wouldn't do it. So therefore I mean if that's the scenario then this call option will be in term as out of the money. So I mean one important point is being in the money does not automatically means that the entire trade is profitable because I mean when you purchase a call option there is the buyer of the call option we have to pay a premium. So therefore I mean the underlying price normally have to move beyond the strike price by enough to also cover the premium that was paid previously before the trade reaches its break even point at expiry date. So I mean this I'll give you a I mean I'll share I'll show an illustration of the graph to show what is the break even point and what is the profit taking point or what is the loss point in the upcoming slides.

[00:10:45]Yep.

[00:10:47]So next uh This is actually a option chain which is quite common in all trading desks I mean all trading platforms. So as you can see there's four quadrants two in green and two in red. So I mean you can focus.

[00:11:05]On the left hand side. So on the left hand side as you can see this area is literally for the call option for the call option area.

[00:11:16]Yeah this area.

[00:11:18]Yep it's for the call option. Whereas this area all options yeah.

[00:11:27]So therefore I mean you can see that there's a demarcation. So somewhere in the middle, as you can see the stock price for example, right? Like Apple, right now it's trading because I mean this is a 2 days ago, the the stock price of Apple was $315 and 86 cents. So this kind of stock price will always be demarcated like in the middle. Then anything above within the call options area would be in the money highlighted in green.

[00:11:57]Whereas at the bottom will be highlighted in red.

[00:12:01]As this area options call options that are currently out of the money.

[00:12:06]Then on the other hand on the right hand side, you can see the first quadrant is demarcated in red for the put option. Anything any strike price that are below the current share price is considered out of the money and anything above the current share [snorts] stock price is considered in the money.

[00:12:27]Yep.

[00:12:30]Any index?

[00:12:33]Okay.

[00:12:34]So next this is another very important concept which is for option trading which is exercising of an option and also an assignment of an option. So exercise applies to the option buyer when the option buyer exercise a call, the buyer uses the rights to purchase the underlying share at the strike price which I've shared earlier. So for example, if you purchase $100 call then if let's say in one week's time the share price went up to 110, then as an option buyer you're able to exercise your option right to purchase the underlying shares at $100 as compared to the current share price that is currently trading at.

[00:13:17]Whereas for an option buyer for put option, the buyer uses the rights to sell the underlying shares at the strike price.

[00:13:25]So which is also another case that I've shared earlier. If let's say for example, you purchase a put for example right now the share price is trading at uh $80. But, you purchase a put previously that entitles you to sell it at $100, then this will gives you the right to sell the uh share price at $100 as compared to $80 like if you trade it on the market.

[00:13:50]Yeah.

[00:13:52]Next uh will be assignment. Assignment applies to option seller, while the option buyer exercise the option. So, like I said, uh in option trading there's two parties like option buyer and option seller. So, if right now I'm the option seller, then assign I will take on the assignment risk. So, assignment applies to option seller and the option seller will be assigned if the option buyer exercises their rights.

[00:14:18]Then, I as a option seller will have to fulfill the obligation under the option contract.

[00:14:25]So, assignment is one of the biggest risk for option seller because if there's insufficient fund to take on the 100 units of stocks, then the option position will be forced liquidated by the broker.

[00:14:36]Yeah. So, I mean this is one of the risk that for option seller itself. Yeah.

[00:14:44]So, I mean now let's examine uh for our quickly run through on some examples for option uh trading. So, there are four basic option positions. So, I will begin with buying a call. So, in this example, Apple is trading at approximately $315.51.

[00:15:02]The investor purchased a call option with a strike price of $330, which is uh highlighted there in yellow.

[00:15:11]And pays a premium of $4.45 per share. So, do do remember that uh this $4.45, right? With uh down here.

[00:15:23]This uh is the premium.

[00:15:25]If you are a buyer, then this is the premium that you have to pay. But, if you are the seller, then this is the premium that you are collecting. So, do remember that although here shows $4.45, right? But, because an option contract uh controls 100 shares, so you do have to multiply this by 100, which down here I have mentioned premiums to be paid for this contract that you're buying would be $445.

[00:15:52]Right?

[00:15:53]Okay.

[00:15:57]Okay.

[00:15:59]Okay. So, yeah, what I'm showing right now is the profit and loss graph for a buy call option based on the share price movement. So, despite us just now the example, right? Us getting a strike price of $330, at expiry, the break the break-even point is calculated by adding the premium that we have pre- previously on on top of the strike price that we have mentioned, right? So, the calculation for this is $330 plus the $4.45 per share, which equates to $334.45.

[00:16:34]So, I mean, if if Apple remains below $330 at expiry, then I mean, there's no point, right? To activate this I mean, to yeah, exercise this call option. Because I mean, if the share price is trading below $330, then I mean, you have the rights to purchase it at $330, then why would you want to exercise the rights, right? So, in this case, the call option will generally expire out of the money.

[00:16:59]However, I mean, if the buyer uh uh purchase this call option, right? The maximum loss uh would be the premium paid, which is $445.

[00:17:11]So, the break-even point, right? Uh if let's say for example, if the Apple is trading between uh $330 and $334.45 at expiry. The losses, as you can see, the losses starts to diminish as the option has intrinsic value, but the value is not yet sufficiently to fully recovered from the premium.

[00:17:32]For example, the four the $445 premium that we have paid previously.

[00:17:37]So, the only time where the option buyer makes profit is when Apple right Apple shares rises above $334.45.

[00:17:49]Then only then the position would starts to generate a net profit at expiry.

[00:17:54]Right? So, despite us having a strike price of $330, because we paid an additional premium for this call option to have the rights to buy at $330. So, we have to take into account of this additional four $4.45 per share.

[00:18:12]So, after we take into account, then yeah, the share price have to rise above the $334.45 in order for us to make a profit. Right?

[00:18:22]So, the maximum profit is theoretically unlimited because the share price can continue increasing to the moon because there's no caps for a share price to to to rise up.

[00:18:34]Whereas the maximum loss for call option buyer is limited to the $445 premium paid. So, why is it that the maximum loss is because that's the premium that you paid. So, in the event if for example, just now I mentioned, if the share price hovers below $330 at the end of expiry, then at most you only lose the premium that you have paid previously.

[00:18:56]This is why, I mean, buying a call option may appeal to someone who is bullish who wants a known maximum loss. However, I mean, being correct about the direction is not enough. The stock must also move sufficiently, and it must also do so, do so before the option loses too much value through time decay. So, I mean later I will also share on the risk of what is time decay. Yeah?

[00:19:20]So, next would be the vice versa.

[00:19:23]Now, we are talking in a point of view that I'm the call option seller.

[00:19:28]Right? So, right now I'm selling a call option. Using the same example, if let's say Apple is trading approximately $315, the investor, I mean, can sell a call option with a strike price of $330. So, instead of paying a premium just now, right now since you are the seller, then we are receiving the premium for this contract. So, for this option, $330 strike price option that I'm selling, I'll be receiving a $445 premium.

[00:19:57]Right?

[00:19:58]So, Yep. So, based on this profit and loss slide, the seller's maximum profit is the premium collected in this scenario.

[00:20:08]So, I mean, if Apple remains below $330 at expiry, then the call may expire worthless. So, I mean, the call the buyer of the call option wouldn't exercise their rights. Then as the seller, I mean, it's a good thing for me like because I collect free premium.

[00:20:25]Right? But, I mean, the break even point for this is also a line, which is $330 plus $4.45, which equates to $334.45.

[00:20:37]Yeah?

[00:20:39]So, I mean, if Apple rises above $334.45, then our call option may begin to generate a net loss at expiry. Because, I mean, we are selling the option we are selling the call option now. So, if let's say for example, if maybe the call buyer choose to exercise their rights. Maybe say for example, now the share price went all the way up to $350. Then as a call option seller, then I've no choice like to sell to the call by to I mean to sell to the the investor that I promised that I will assign him with the shares of 100 units at $330. Whereas if I didn't sell the call option, then I could have just, you know, go to the market sell it at $350 instead. That's why anything beyond the break-even point would start to reflect a loss for my side.

[00:21:31]So, for call option, there are unlimited downside because if let's say the price goes to the moon beyond $350 say 500, then I'll be losing on to the opportunity cost. So, that's the unlimited downside for uh for selling a call option. Yeah.

[00:21:48]So, I mean uh therefore, I mean for a loss on a naked short call position is theoretically unlimited. So, what do I mean by naked short call? Naked short call means that uh a client does not have the underlying stock in their position and they do a sell position a sell call option.

[00:22:09]So, if let's say I don't have for example 100 units of Apple shares in my in my portfolio and I do uh sell call option in the market then as the seller right now, if let's say the share price went to the moon, then I have no choice but to uh because I have to fulfill my obligation to the buyer, then I have to since I have do not have the stocks on hand, right? Then as the seller, I will have to go to the market to buy at the exorbitant price. And deliver it to the buyer at the promised strike price. So, if let's say it goes up to $500, they have no choice but to buy the shares at $500 and deliver it to the buyer at $330. So, that difference would be the loss that I'm taking.

[00:22:54]Therefore, just now I emphasized on uh unlimited losses for uh sell call option and the riskiest position you can be would be a naked sell call position, which I have shared earlier.

[00:23:06]Yeah?

[00:23:07]However, if you owns 100 Apple shares and sell one call option, then this position becomes a covered call, which I have which I will share later on. So, in this case, the risk profile is different because I mean the seller already has the share on hand available to deliver if they are being assigned.

[00:23:27]This is why it is important to distinguish between a naked call and a covered call. The premium of $445 may appear attractive, but it should never be considered in isolation from the potential obligation and risk that you as a option trader will have to take. Yeah?

[00:23:49]Okay.

[00:23:50]Next would be a buy put option. So, in this example, Apple is trading approximately $315.22.

[00:23:57]An investor purchased a put option with a strike price of $300 and pays a premium of $4.28 per share. So, the total premium that the investor will have to pay is $428, right?

[00:24:11]As you can see from this slide down here.

[00:24:14]So, in this profit and loss graph, you can see that the break-even point is calculated by subtracting the premium from the strike price. Previously, because we are the buyer, we have to add the premium to our strike price to dictate the break-even point. But because now we are the seller, we earned the premium, so we have to take into consideration the premium that is being earned for selling this contract. So, the calculation is $300 minus the $4.28 premium that we have collected up front, right? Which equates to $295.72.

[00:24:52]So, this is the break-even point. So, if let's Let's Apple remains above $300 at expiry, then the put option will generally expire out of the money, right? And the buyer loses the $428 premium, right?

[00:25:09]If let's say for example Apple falls below $300, but remains above $295, $295.72, then this option has intrinsic value, but the value is not yet enough to fully recover the premium.

[00:25:24]So, if let's say for example the maximum loss for this is limited because the the maximum loss that uh buy put options investor can make is the premium that that is being paid upfront, right? But the maximum potential profit that occurs would be the maximum let's say for example if the share price goes all the way to zero, then yes, that is the maximum profit that they can achieve, but I mean the chances are very slim, but that is still possible, and that is the maximum profit that they are able to attain. Yeah. So, at $0, the $300 put would have an intrinsic value of $300 per share or 30,000 per contract. But also must do remember that why I put the the maximum profit is only 12,000 29,572, right? Is because this is after subtracting the $428 premium. The which is the maximum potential profit which will make the maximum potential profit to be around 29,000, right?

[00:26:32]So, unlike a call, the profit on a put is not limited is not unlimited, but because the stock price cannot fall below zero, whereas the vice versa if let's say you purchase a call option, then the profit is unlimited because the share price can go to the moon, yeah.

[00:26:49]So, next Uh, we'll be sharing on the sell put option. So, once again, I'll use the Apple example. Uh, if Apple is trading approximately at $315, then the investor will sell put with a strike price of $300. They receive a premium of $4.28 per share.

[00:27:07]So, the maximum profit, uh, for this put be the premium that is being collected.

[00:27:13]If let's So, let's say for example, if Apple remains above $300 expiry, then the put option may expire worthless. And it'll be a good thing for me as an option seller because I'll keep the, uh, the the option premium la for free.

[00:27:28]Right? So, the break-even point is still the same, $295.72.

[00:27:33]So, let's say for example, if Apple falls below $295.72, then this position will starts to generate a net loss at expiry. Because why is that so? It's because if let's say for example, if right now the share price goes down all the way to $200, right? Then, uh, I mean, I've no choice la but but but to sell it to the guy at a loss la. Therefore, I mean, this will result in a loss position for me as an option seller, right?

[00:28:06]So, the maximum loss I would, uh, incur as an option seller would be instead of the maximum profit right now, it's the flip side, which is the maximum loss will be 290, uh, 29,572 when if the share price tanks to $0 la.

[00:28:23]Yeah. So, this loss is substantial, although it's technically limited because the share price cannot go below zero.

[00:28:30]Right? Selling a put, uh, may be used by an investor who is generally willing and financially, uh, available la to purchase the share at the strike price. It should not be done solely because the premium, uh, appears to be attractive.

[00:28:45]So, before selling one $300 put, the investor should also recognize that the assignment obligation represents, if let's say for example, if I sell a put and if I get assignment, then technically I have to have almost 30,000 in my account for the assignment of 100 units of shares, yeah.

[00:29:06]All right. So, let's now switch over to the Longbridge application as I'll be doing a live demo from our mobile application and I'll briefly also show everyone where to locate the option chain, how to identify the expiry dates, choose different strike prices, submit order, and also where to monitor your positions after that, right? So, for I mean for new investors who who have not downloaded our Longbridge app, you can scan this QR code located in this slide to sign up and also follow follow along the this webinar, yeah. So, okay, maybe give me a while to pull up the mobile screen, yeah.

[00:30:10]Okay.

[00:30:12]All right.

[00:30:13]So, yeah, this is our Longbridge application. So, as you can see right now, I'm in the demo account, right? So, if let's say you are having you already created an account, then it's the same thing. But, for those who have not uh started their journey their trading journey with Longbridge, then yeah, you can just take a look at the screen and follow us through, right? So, for example, let's say for For right now, I would like to trade Apple options, right? I'll go to search at the top right-hand corner.

[00:30:46]There's magnifying glass, right?

[00:30:48]I'll click on the magnifying glass.

[00:30:49]Then I'll say Apple.

[00:30:52]Then I'll locate Apple stock. I'll just click on it.

[00:30:56]So, at the bottom, all the way at the bottom, beside the buy and sell button, as you can see there's this small function called options, right? So, you just click on options.

[00:31:07]Then you can take a look at So, basically, this is just now the option chain that I've shared with you. But because this is a mobile application, so it's slightly smaller. But it's exactly the same. So, in the middle, $334.78 is currently the share price. That's trading on for Apple shares. Then everything on the left-hand side is for call call options.

[00:31:28]Then everything on the left right-hand side is for put options, right? So, if let's say you want to filter, and you just want to see, "Hey, I just want to see call options." Then as you can see, beside the word single link, then there is this section.

[00:31:41]That has all call and put. So, you just click on call.

[00:31:45]Then basically, this is just a chart.

[00:31:47]There's just table to show you everything for call option.

[00:31:50]Then if you click on put, then everything would be for put options only, right?

[00:31:56]So, let's say for example, right now it's $334.77, and I say that, "Okay, maybe in 1 month's time, I want to say maybe I want to earn some premium, right?

[00:32:11]No, actually, if let's say I want to purchase, I think that Apple share may goes up to say maybe $400, right? In 1 year's time or something like that." So, if let's say maybe but I want to purchase the stock in 1 month's time.

[00:32:27]So, as you can see, right? What I'm scrolling right through right now, this is the calendar for option trading.

[00:32:32]So, if let's say for example, I just want to have a 1-month duration. Let's say if one month it hits my price target, then I will just purchase that, right? So, I'll scroll to 28 days, which is almost approximately one month, and say I want to have a strike price of $35, right? Sorry, not $35, $250, because I'm expecting maybe the share price to goes all the way up to $400 by the end of this year, and I don't mind owning the shares in one month's time at $250. Then, I can purchase I can just click on the $250 call option. As you can see, the $4.35, I just click on it.

[00:33:14]So, as you can see, this will pull up the purchase screen.

[00:33:17]So, what you're seeing here right now, you can see there's different types.

[00:33:21]There's limit order as well as market order, buy at touch, or sell at touch, and trail to buy, and trail to sell.

[00:33:28]But, usually we are just for option trading, it is recommended that to put limit order rather than market order, because market order sometimes it might catch those really like those really far out prices that may be unfavorable to you.

[00:33:43]So, limit order will always fixate the price at the determined price that you wish to enter at, right?

[00:33:50]So, next up will be direction between buy or sell. So, for example, if let's say I'm thinking I'm I'm bullish Apple investor, and I say that oh, I believe that Apple will go up to $400 in future.

[00:34:03]Then, I'll say that okay, maybe today I can buy a call option for $250 for one month's time. If let's say it goes up to $370, then yeah, I will have make a profit from there, right?

[00:34:15]So, in terms of direction, I'll put buy, then price. This price is the median price like between the bid and ask. So, as you can see, right? Somewhere on top of the limit, $4, you can see the green side. This is the bid side, which is what the buyers are willing to pay, and the sellers our side which is the sellers is uh $5.05 what the sellers are asking for.

[00:34:38]So usually the price right below that direction the $4.35 would be the in between. That's the comfortable price that most likely that the the system is prompting you that it most likely be transacted at. If let's say today right now I want to purchase the call option.

[00:34:55]Yeah.

[00:34:56]So in terms of quantity there I just put for example I want to just buy one. I will just put one.

[00:35:02]Then time in force would be either day good to cancel or good to date. So if let's say I just want it to be alive this trade to be alive for today then I will just remain it as day.

[00:35:13]So next up for session session right now we do support uh trading of options pre-market. So for this you can click on this the session and and select pre-market. However if let's say we are doing on regular trading hours at 9:30 p.m. tonight then we just select regular trading hours. Right?

[00:35:35]So after everything is done below also will share with you for this position right what's the maximum profit and what's the maximum loss which I've shared with you earlier on the example.

[00:35:46]So as you can see for buy call option this is very similar this is similar to the profit and loss graph that I've shared with you earlier as well. So you can just drag along and see that oh if prices move to this what's my maximum loss and if prices goes above that what's my maximum profit. Right? So the maximum profit is unlimited as you can see from here.

[00:36:04]So before everything is confirmed before you press the buy as you can see at the side there's a very small button called preview. You can click on that and this will show pull up the order details.

[00:36:17]To show you that for this option that you want to trade how much commission you're paying how much platform fee you're paying and third party charges and this is roughly $537 is the rough amount that you're paying to purchase this option, right?

[00:36:33]But do also remember that for option trading you will incur initial margin.

[00:36:37]So basically this is the margin because option trading is a leverage product. So you will incur margin. So margin will determine like how much position you're able to open in the future or also maintain the position in your portfolio. So just do remember that if let's say for example uh this call option that you're opening right now is over your initial margin then yeah then you're unable to open up because our system will deem it as uh you do not have sufficient buying power then you're exceeding your purchasing power then the order will be rejected.

[00:37:12]Right? So once everything is settled then you just press buy.

[00:37:18]Yep. Then as you can see right now it says the order will not be placed until the uh regular trading hours.

[00:37:25]But if let's say for example everything goes through, right? Then you should see under portfolio here you should have uh uh order that is something like that. So instead of orders that are uh pending it should be filled.

[00:37:42]Then you have this Apple call option in your portfolio under USI. Okay?

[00:37:48]So basically that is a brief example of how to purchase an option.

[00:37:54]Then vice versa. So if let's say I want to sell then it's the same thing but this time around uh I will just do instead of let's say for example I want to sell put right now.

[00:38:06]Let's say for example if maybe I think that you know, I want to collect some premium, right? Option premium and if let's say for example if Apple goes down to $300 I don't mind uh getting 100 units of Apple shares at $300. But if let's say it doesn't goes down to $300 then uh I would just like to you know collect the premium up front. So as you can see for $300 strike in a 1 month's time duration, it's 205 yeah 200 $2.05. But you have to times 100 multiplied by 100 times lah, right?

[00:38:42]So we click on that you can see that this is the current price that we are trying to sell it off at.

[00:38:50]Then you can see maximum profit is the premium that we are collecting up front which is 205, but the maximum loss is 29,779 $795 if the share price goes down all the way down to zero. So you this would be the event whereby if we got assigned 100 units and if Apple goes down to zero then that's the maximum loss that we will be making.

[00:39:16]Yeah.

[00:39:17]So similarly you can click on preview then you take a look at what it charges to open up this sell position.

[00:39:25]So as you can see that this initial margin what takes up around like 6.5 k right?

[00:39:31]Of initial margin in order to maintain this position.

[00:39:35]So do do remember that if let's say for example if we open a $300 strike price put option. Let's say for example you do a sell put option at $300 strike in 1 month's time and when 1 month's time comes and Apple share price really goes very close to $300 then the maintenance margin in order to maintain this position will start to increase exponentially because when the current share price is very close to your strike price the I mean the probability of you being assigned is higher. Hence our system will require a higher margin lah.

[00:40:17]To ensure that you as an investor uh uh sell put option investor has sufficient cash in their balance in your balance to take on the assignment risk. Yeah. So, if you do not have enough margin or sufficient cash in your account, then this position will be forced liquidated.

[00:40:36]Yeah?

[00:40:38]All right. So, I believe basically that's about it for the live demo.

[00:40:46]Okay. Let me quickly go back to the slides.

[00:40:56]Okay.

[00:40:58]So, now I'll be sharing on two uh strategies uh after knowing how to perform option tradings on our application, lah. So, uh maybe first we will look at the first basic option strategy, the cash secured put. So, what's a cash secured put? Uh basically involves uh selling a put option while setting aside enough uh cash to purchase the shares if assignment occurs. So, this strategy is commonly considered by investors who are already willing to purchase a stock at a lower target price we have shared uh earlier.

[00:41:28]Right?

[00:41:30]So, yep. Let's use this example uh that is being shown in the presentation.

[00:41:35]So, if for example, if ABC uh ABC stock is currently trading at 110, but the investors will prefer to purchase 100 shares at $100, then the as an investor, I have two choices. The first choice is to place a limit order at $100 and I just wait for the share price, lah, to just drop to $100 and I enter at $100.

[00:41:56]Or uh if let's say [clears throat] for example, if I do that, uh if share price does not falls uh to $100, then as an investor, I do not purchase the shares and I earn no additional uh returns, lah, from just purely waiting for the share price to drop to $100.

[00:42:14]Or I can do the second choice, which is to sell a hundred dollars put option. By selling the put, I'm able to receive a premium. So suppose the premium is $2 per share or $200 per contract, right? There is two main possible outcomes.

[00:42:31]Right? If ABC stocks remains above $100 through expiry, then I mean the put option may expire worthless. So I don't get my shares at $100. But I keep the $200 premium that I've sold on this put option on ABC stocks. So the other scenario would be if let's say for example ABC stocks fall below $100, then I as a seller of the put option will be assigned these hundred units and I have to purchase the hundred shares at hundred dollars. However, because I'm the seller of the put option, right?

[00:43:08]I collect the $2 premium. The effective break even cost per share would be $98 because right now I purchased the share at $100, but I received a $2 premium per share. So 100 minus $2 will be 98. So basically my break even point is $98, right?

[00:43:27]So the cash requirement is based on the strike price multiplied by 100 shares.

[00:43:31]So if let's say for example, if I'm selling a $100 put, then the assignment obligation is $10,000.

[00:43:37]So this strategy, right?

[00:43:40]>> [clears throat] >> Sorry.

[00:43:42]This strategy should only be used when investors is comfortable to purchase the shares and have sufficient cash available. There's also a significant downside risk.

[00:43:52]Why do I say that? It's because if let's say for example, suppose ABC shares, right? Falls below 110 all the way to $60, then I mean I do get the shares. I do get assignment of 100 units of the shares at $100, but right now since the share has plunged to $60, then basically I'm losing on the the shares valuation, which is a $40 $40 per share valuation. So, basically that amount of loss would be magnified as well.

[00:44:23]So, the $2 premium only would provide me a small amount of protection, but it does not eliminate the loss that's caused by a major decline. Yeah?

[00:44:35]So, another important point of concern, which is the return the return calculations that they show in this example. So, just like I mentioned in choice number one, the ROI is 0% as I'm not doing anything and just waiting for my entry price target entry price to hit. Whereas, for choice number two, if let's say for example we receive a $2 premium per share, a $2 premium divided by $100 strike price represents approximately 2% of the duration.

[00:45:04]Wait, for for I mean, sorry. 2% 2% of investment for the duration I'm waiting for the share price to fall to my entry price target. However, this should not automatically be interpreted as a guaranteed or repeatable return.

[00:45:18]So, the investor remains exposed to assignment or share price fluctuation risk, liquidity risk, as well as changing market conditions, right?

[00:45:27]So, I mean, cash secured put can be useful as an entry strategy, but investors should also be comfortable with owning the underlying company. So, a good question to ask before selling the put option is, "Would I still be happy to buy this stock at the strike price if let's say the market falls sharply?" If the answer is no, then the premium alone should not justify the trade as a option as a put option seller.

[00:45:52]Yeah?

[00:45:53]So, next up our second strategy would be the covered call. A covered call involves owning the underlying shares and selling a call option against those shares. It is called covered because the investor already owns the shares that may need to be delivered if the assignment occurs. So, let use this example from from the presentation. If let's say ABC stocks is currently trading at $100 and the investors owns 100 shares and is willing to sell them off at 110.

[00:46:21]The first choice is to place a sell limit order at 110 and I just wait long.

[00:46:26]So, if the share price reaches 110, then me as a investor, I will just sell my shares and earn a capital gain of $10 per share. Right? Or the second option I can go for is to sell a 110 call option while continuing holding on to my shares.

[00:46:45]So, suppose I have received a premium of $4 per share based on the call option that I've sold. This will lend me around $400 premium per contract. So, if let's say for example ABC remains below 110 at expiry, then this call option will be worthless for the option buyer. Then as a investor as a sorry, as a call sell as a sell call option investor, then I'll keep the shares as well as the $400 premium which I've attained previously.

[00:47:18]However, if let's say for example ABC shares rises above 110 and the assignment occurs, then I as the investor have to sell the shares at $110 to the other party.

[00:47:31]Then I mean I but I mean I do also keep the premium but also earns a gain also earn the gains of a share price appreciation from $100 to 110.

[00:47:43]Right?

[00:47:45]So, base So, based on the simplified example down here, right? If let's say we want to do ROI for it.

[00:47:57]So, the capital gain for choice number one is 10% and the premium uh on the other hand, for choice number two, there's an additional premium of 4%. So, actually for if let's say for example, if I sell a car, right? Then my total ROI if I apply options would be 14%.

[00:48:16]You know, 10% coming from stock appreciation, then 4% coming from uh the call option that I've just sold.

[00:48:22]So, actually this is 4% more than what if let's say I just do traditionally I just put sell the minute and just wait.

[00:48:29]So, basically this is the benefits of deploying uh uh option strategy for your trade itself.

[00:48:37]Yep.

[00:48:39]Sorry.

[00:48:41]So, I mean uh if let's say for example, right?

[00:48:47]It I mean the cover call uh although although uh investor earns a premium and again uh of 110, the investor misses the additional increases uh from 110 to 140 based on choice number one.

[00:49:01]So, the cover call option therefore exchanges I mean some future upsides potential for premium income. So, it is most suitable when investors is generally genuinely willing to share the sorry, willing to sell the shares at the selected strike price. Another important point is that cover call does not provide complete downside protection.

[00:49:21]So, let's say for example, if ABC uh shares falls from $100 to $60, then investor still suffers a large loss on the shares depreciation. The call premium provides only a limited cushion, whereas the cover calls are therefore not risk-free and they combine share ownership risk with an obligation to sell at the share price if assigned.

[00:49:44]Yep. So, last but not least uh I'll share quickly share on some key risks of option trading.

[00:49:50]Uh Uh the first risk would be assignment risk. So, option seller may be assigned uh when option buy exercise the contract. A short call option uh uh sorry, a short call seller may be required to sell 100 shares per contract at the strike price. A short put seller may be required to purchase 100 shares per contract at the strike price.

[00:50:10]Assignment risk is generally higher when an option is in the money or close to expiry. Early assignment also can occurs before expiry including uh around the ex-dividend date for the shares.

[00:50:23]So, and as an option seller therefore will prepare for assignment rather than assuming that they can always close the option at the last minute. Right?

[00:50:31]The second risk is forced liquidation which I mentioned earlier. If assignment for market mo- uh movement cause the account to have insufficient balance uh or but uh or margin uh uh availability, then the broker may take a risk management uh action and the position of the option may be liquidated uh without waiting for the investor to prefer uh may be liquidated without waiting for the investors uh preferred price.

[00:51:00]So, during uh volatile periods uh forced liquidation may take uh place at unfavorable execution price and margin requirement may also changes, right?

[00:51:09]Because I mean it it it is uh it follows along the share price movement, right?

[00:51:15]So, a position that appears adequately funded earlier may require significantly more margins after large market movement or change in risk parameters.

[00:51:24]Right?

[00:51:25]So, always uh maintain a healthy buffer if uh in your in your portfolio. So, a investor should not use all their available available purchasing power simply because the platform allows the order to be placed.

[00:51:38]Yep.

[00:51:40]So, the last three risks uh that I'll be quickly covering would be unlimited uh loss uh potential of a naked call we have mentioned earlier. So, by selling a call without owning a underlying shares, the stock may continue to rise, creating an increased creating a exponential increase of losses, right?

[00:51:59]Then, next up will be time decay. It's also another risk which investors should take on.

[00:52:04]Uh SN should take note on.

[00:52:06]Uh option are wasting assets.

[00:52:09]Uh all else being equal, the time value of an option generally decrease as the contract approaches expiry. So, time decay works against option buyers because the underlying stock must move sufficiently before expiry.

[00:52:23]So, I mean, you know, time decay may benefit option seller on the other hand because if let's say for example, if it doesn't touch at the strike price, then basically uh the option seller will earn a free premium, right?

[00:52:36]Then, last last but not the least uh would be the leverage risk because one contract represents 100 shares, right? A relatively small premium may create a large underlying exposure. So, for example, if you're paying $500 for an option, may provide exposure linked to tens of thousands of dollars which I mentioned earlier on the on the Apple example. So, premiums can be like four, $500. But actually, if let's say you to get assignment, actually you have to have a standby of let's say 30 plus thousand or 40 plus thousand dollars, right?

[00:53:08]So, this can magnify profits, but it also can cause the option to lose a substantial percentage percentage of its value very quickly.

[00:53:16]Right?

[00:53:17]All right. So, lastly, I'll give some real-life examples to bring the option concepts together.

[00:53:27]So, for example, if let's say right now SpaceX is the quite a heat thing in the market, right? So, imagine let's say for example, you have missed on purchasing SpaceX during the first week of its IPO, right? Instead of chasing a stock higher, right? Perhaps you can you're you're able or you're happy to buy only if it falls to $100. So, what I'll do I'll be selling a cash secured put and let you potentially earn a premium while waiting for the share price to go below $100 now because I think right now it's trading around 130 plus dollars, right? So, in this example SpaceX is trading around $135 while investors would prefer to own the shares at $100. Then the investor is willing to purchase 100 shares within the next month and wants to collect premium while waiting. So, one possible to sell $100 put. So, if the stock price remains 100 above $100, then I as the seller would will not receive the shares but keep the premium. However, if the stock price falls below $100 and assignment occurs, then I'll be required to purchase the shares at $100. Assuming a premium of 200 Assuming the premium of $2.50 per share, then I'll receive a $250 per contract, right?

[00:54:38]So, Yeah. Next up would be the next example would be for example using Micron example. Where if let's say for example I as a investor who already owns Micron shares and I'm happy to sell at $900.50, instead of simply placing a sell order, I as an investor could sell a $950 call option and receive premium while waiting. So, suppose the premium is $8.60 per share or $800 or $860 per contract. If Micron remains below $950, then the call option may expire worthless and I receive the free premium. Or if let's say for example uh if it goes let's say for example rise above $950, right? And assignment occurs, then I as the investor will sell the shares at 950 and also keeping the premium.

[00:55:31]Yeah.

[00:55:33]So, I mean a covered call should therefore be placed at a strike price I mean, if uh at a strike price that the investor is genuinely comfortable at selling at.

[00:55:42]And it should not be sold on shares that the investor is unwilling to part with.

[00:55:47]Or the worst case is if let's say you're selling on a naked position, then that is uh very risky approach as it exposes you to unlimited losses, right?

[00:55:58]So, yeah. I think we have come to the end. Uh before we move into Q&A segment, uh new users may refer to this welcome rewards. Shown being on the shown on the screen. And the the available rewards may include option-related cash coupons subjected to prevailing uh terms and condition. So, if you're interested, uh please scan the QR codes or refer to the LongBridge application for the most current campaign details. And promotional rewards should not be the primary reason for entering uh an option trade. Always uh make sure that you understand the product and also the contract specification and also the associated risk that I shared earlier before placing an order.

[00:56:35]So, yeah. Uh maybe I'll move on to Q&A and I'll leave the QR code down here.

[00:56:44]So, okay. I see the first question. Uh can I lose more than my premium? So, for this question, it depends uh on whether you're buying or selling the option.

[00:56:53]When you buy a call option, uh when when you're buying a a call or a put option, right? Your maximum loss is generally limited to the premium that you're paying. For example, if you say for example, you pay $200 for an option contract, right? The most uh you can lose is $200 if the option expire worthless.

[00:57:10]However, when you sell an option, the potential loss can be much larger than the premium received. So, for example, just now I mentioned the very risky uh approach. If let's say for example, you're selling a naked call, then theoretically you have unlimited losses because if let's say the share price can continue to rise and rocket to the moon, right? Then your short put uh I mean, that the position would be very unfavorable to you. So, you are losing more than the premium that you have collected, right?

[00:57:37]A short put can also, I mean, result in substantial losses if, let's say for example, the underlying shares uh fall uh falls drastically. So, this is why we get a short clearly understand the maximum losses and profits and also the break-even point like which I've mentioned earlier before entering into any options position.

[00:57:57]Yep.

[00:57:59]Okay.

[00:58:01]Uh Next question.

[00:58:03]Uh must I exercise my option or do I have to exercise my option? Well, the answer is uh no. As an option buyer, you have the right but not the obligation to exercise the option. So, before expiry, you can actually generally have three choices. You can sell the option to close the position or you can exercise the option or you can allow the option to expire.

[00:58:26]So, many traders simply sell the options before expiry instead of exercising it, especially when they do not intend to buy or sell the underlying shares.

[00:58:34]So, however, if an I mean, in-the-money option may automatically be exercised at expiry depending on the broker and clearing house rules. So, you should always check, I mean, with your broker, for example, with Longbridge, the exercising procedure if, let's say, you wish to exercise your option and ensure that you have also sufficient fund within your portfolio.

[00:58:57]If, let's say, you would like to exercise your option. Yep.

[00:59:04]All right.

[00:59:06]Okay.

[00:59:08]Can I trade option without owning the shares? So, yeah. Just now I mentioned you do not need to own the underlying shares to buy a call option or put option. For example, you may buy a call option if you expect the share price to rise or buy a put option if you expect the share price to fall. However, certain options uh selling strategies may require shares or sufficient collateral. For example, if a covered call option, you should own the underlying shares.

[00:59:34]And a cash secured put requires sufficient cash to purchase the shares if there is an assignment. All right? A naked short call a naked short call does not require you to own the share, but it carries, like I mentioned, it carries significant risk. Higher risk because this is unlimited loss position right now. Yeah.

[00:59:52]So, whether a strategy is available uh is I mean is available also depends on your broker's uh trading permission and risk requirement.

[01:00:00]Yeah.

[01:00:03]Okay.

[01:00:04]Uh is buying call I mean, sorry. Is is buying options safer than selling options? Well, buying options are generally provided a clearer and more limited maximum loss uh a picture because the buyer usually cannot lose more than the premium that they are paying. However, I mean, limited losses does not necessarily means that buying options is easy or low risk because option buyers are affected by time decay also. And they need the market to move sufficiently if uh in the correct direction before expiry. So, even if the investor is correct at predicting the direction of the stock, but the option can still lose value if the movement is too small or happens too slowly.

[01:00:44]All right? So, option seller may have a higher probability of earning a small profit, but potentially losing uh much significant if, let's say, there's an assignment and subsequently has to get assigned and the share price tanks.

[01:00:58]Therefore, I mean, neither side is automatically safe. The risk depends on the strategy, strike price, expiry dates, as well as I mean, position size, and whether the position is properly covered or not covered. Yeah.

[01:01:13]Okay.

[01:01:15]Next Okay, maybe I take on a few more questions because I think time is running out. So, should beginners buy weekly or monthly options? So, monthly options are generally easier for beginners to manage because, I mean, they provide more time now for the trade to work. So, weekly options are usually cheaper because they have less time remaining, but they also require experience and much They also, I mean, not require experience, but they also experience much faster time decay because right now I only have a one week time window time window as compared to a one month time window. So, the option can lose us lose us its value very quickly if the expected price movement does not happen immediately.

[01:01:57]So, monthly options usually cost more, but the additional time can reduce the pressure that is needed for an immediate market movement. So, beginners, I mean, it's advisable to focus less on whether an option is a weekly or monthly and more select more on selecting an expiry that gives their investment view enough time to develop.

[01:02:18]Hence, I I believe that a one month time period is a comfortable start for a beginner's investors.

[01:02:26]It is also, I mean, important to avoid spending too much on the premium simply because a longer dated option may appear safer safer. Right?

[01:02:37]So, next Should I hold option until expiry? So, I mean, not necessarily. Like I mentioned previously, you do not need to hold your option until expiry to make a profit.

[01:02:50]Many traders close their positions before expiry because option prices can become more volatile as expiry approaches and time decay also accelerates, especially during the final few days.

[01:03:02]So, holding on to expiry may also create exercise or assignment risk as an investor. So, for example, if an in-the-money, right, option may result in you purchasing 100 shares per contract while short option may result you in being assigned to or call away from you. So, I mean before entering a trade, it's helpful to decide whether you are I mean, it's helpful to decide your profit taking level, your maximum accepted acceptable loss level, and also maybe the window la. The how many days before expiry you plan to close this position. Or whether are you financially prepared to get a to exercise the option or get assignment.

[01:03:44]So, these are some of the key takeaways that uh you should take note of when you're deciding whether should I hold on to the option until expiry or should I close it off early.

[01:03:54]Yep.

[01:03:57]Okay. What is the biggest mistakes that beginners usually make when trading options? So, I mean one of the biggest mistakes la that usually I've heard about is buying options simply because a premium appears to be cheap la.

[01:04:12]I mean, a cheap option is after is often cheap for a reason. I mean, because there's no free lunch in this world, right? So, it may be far out from the money, close to the expiry, or require a very large price movement before it becomes profitable. So, I mean some other common mistakes includes using too much capital in a single trade.

[01:04:31]Or perhaps maybe investors might ignore time decay focus only on market direction or choosing an expiry that is too short. So, holding on to I mean, this are some of holding on to the options that have all these factors are kind of risky. So, for beginners option traders, these are some of the things or some of the mistakes la that they might overlook when they start their option trading strategy.

[01:05:01]Yep.

[01:05:03]Okay. So, next Can you show how Okay, from Desmond, right? Can you show how to close position before expiry?

[01:05:14]Okay, so like I mentioned just okay, basically this right? Uh I I mentioned previously once okay, maybe I do a quick one.

[01:05:26]Give me a moment.

[01:05:30]Okay.

[01:05:37]Yeah, I'll quickly share the screen again.

[01:05:41]So for example, right? If let's say you open up a position.

[01:05:48]Uh an option position, right? It will locate in let's say for example.

[01:05:54]So let's say for example within your portfolio you have this position and it's already filled. Basically there's a close function there. I mean there's a close button there.

[01:06:04]There there you're able to click on and you're able to tap on and you just since for example if let's say right this is a buy, right? And your buy has already gone through. So if you tap on the close then you'll prompt out the sell the sell uh order page for this particular position.

[01:06:20]So once let's say for example if the option expires like next Friday, right?

[01:06:25]But next Monday comes you say that it actually I don't wish to hold on to this position already. Then you just come to here then you just click on the option then you can just yeah, there's a close up because this is not filled yet but in the middle there's a close button. You can just click on close and you proceed with the sell of the option. So once you have sell what sorry, once you have sold the position away then essentially you have closed the position for this option. Then profit and loss that that is calculated within if let's say you make a profit then you do you profit up but if you make a loss then you loss.

[01:06:58]Yeah.

[01:07:00]Uh okay, next question. Can we close the position before expiry? Yeah, so this is very similar to just now the question.

[01:07:06]You are able to close the option before expiry date. So, that's really based on what you your time horizon that you're looking at. So, for example, if let's say it still has 3 weeks into expiry, but maybe the profit the the option price has already risen to the profit level that you are comfortable with, then maybe you're able to close it and maybe deploy the cash on another potential trade that you would like to look at, right?

[01:07:39]Okay.

[01:07:41]Uh okay. Uh next question. I've seen strategies on the Longbridge app such as single leg covered covered stock vertical spread collar straddle and strangle. Are these important to know for beginners in option trading? Uh I mean, uh yes. Uh first I'll say as a option trade, sorry.

[01:08:01]As a option trader, right? Uh these are additional strategies that uh Longbridge uh do uh allow our client to trade on. But, like I mentioned earlier, uh if let's say just now the two strategies that I shared earlier covered a stock, which is covered call, and also cash secured put, uh which is also, I mean, this under the single leg. These are the two main strategies I'll say beginner-friendly beginner-friendly strategies that uh newer investors can try on first before touching on more advanced strategy, which I believe our team will cover in the future, such such as a vertical spread collar or even straddle or strangle. Yeah.

[01:08:47]So, I mean, it's a good to know, but I mean, maybe at the start you can do cash secured put or covered collar before moving on to the more advanced strategy in the future.

[01:08:58]Yeah.

[01:09:00]Okay, I think that's all the time we have left for today.

[01:09:05]Uh let me see.

[01:09:13]Option premium. Okay, last question. I think I take on the last very last question. So, option premium will become volatile near expiry.

[01:09:21]Uh this question depends.

[01:09:24]I mean the answer depends. Yes, usually actually if let's say for example the the the counter they are trading is actually a very volatile counter, then yes, the premium will be very volatile even if it's nearing expiry. Right? But if let's say if the counter has not much volume, then actually the premium does may not be that volatile even if let's say there's a 1-month window.

[01:09:52]If there's no action, right? There's no not much volume for the counter itself.

[01:09:58]So, yeah. I mean for counters that are very volatile even near expiry, it will become volatile as well.

[01:10:06]Okay?

[01:10:07]So, yeah. I think that's all the time we have for today.

[01:10:14]So, hopefully today's webinar has helped you to understand that options is not just a speculative product. They can also be a useful tool for generating income, managing risk, and also improve your portfolio flexibility. Uh So, my biggest advice to beginners is that don't rush into complex strategies and start with understanding the basics and learn how call and put option works because those are the fundamentals. And also understand on assignment risk and practice with small budget position sizes.

[01:10:43]Uh once you're comfortable, you can generally explore more advanced strategies like I mentioned earlier, such as straddle, vertical spread, uh and and strangle and etc., right?

[01:10:56]And if let's say for newer investors who don't wish to deploy their their cash or or who use their real life money uh straight away, uh because our application has the demo account function, uh you're able to test it out on a demo account. And once you get a hang of uh trading options uh within demo account, then you can dip your hands into the real life examples using your uh LongBridge account.

[01:11:24]Yeah? So, uh thank you everyone once again for joining our options webinar for today, uh and we'll see you in the next one.

[01:11:31]Yep. Thank you.