 Let's talk about options. I'm going to make a few videos on Fundamentals fundamental concepts of options. This will be part one. I'm gonna I'm gonna cover strikes Months and then a few strategies. Let's go into strikes Strike selection is very important because your option will behave differently and give you different characteristics depending on where it is relative to the current stock price I'm gonna use snapchat and snapchat right now is around 11 dollars now I'm comfortable with the fundamentals of snapchat. I know it's been in the 40 50 60 dollar range and Almost five six dollars. So that gives me an idea of the value. I know it's gonna grow over time So it has a bright future. It's growing between 10 and 20 and sometimes even more than that every year It's finally profitable. So given that fundamental valuation, I'm gonna be bullish and I'm gonna focus on the calls and Depending on the call, I will get a bigger exposure or smaller exposure Or I will get some time decay time decay is when I pay for an option That's far away or above 11 dollars and this is upside down. So 11 12 13 14, etc If I buy a further higher up option or on the table, it's lower I am paying for the option to buy at a specific strike higher up So my break even is higher up and and I'm paying for that. So let's here's an example If I'm buying the 13 call call means up call up I'm paying in this case 12 cents times 100 One option controls a hundred shares. So I'm paying 12 13 cents 13 dollars because times a hundred and I get to buy it. I get the privilege of buying it at 13, which is higher than the current price of 11 so in order for that option to make money it has to go past 13 and More than what I paid. So maybe 13 50 or 14 or 15 or a hundred, but it has to be higher than my strike now If I buy a deeper in the money, which means below the current stock price Let's say I buy the five call That that option will have an easier time making money, but it costs more it has less leverage But there's less or almost no time decay Theoretically, I might be paying five Maybe six let's say six dollars because it's 550 on 650 if I pay six dollars six plus 11 Six plus five, which is a strike is 11. I'm buying the five strike Which means I'm paying six dollars and my cost basis will be six dollars plus the five strike, which is 11 So there's no excess premium in this example Except a few cents. I start making money right away if it goes to 13 I should already be up two dollars. However, I am paying six dollars in this example Which means six hundred dollars to control a hundred. It's a it's a bigger option But it makes money right away. I have to have six hundred dollars in this trade Or I have or I can have $13 in the other trade. So you see how if I think it's gonna go up a lot Maybe it'd be worth it to buy the gambling Option but my break even my cost basis is higher up if I'm gonna use that high leverage option If I if I knew the future which I don't and nobody else does You would you would know exactly which one to buy But if you're more conservative and you want the best cost basis and only a little bit of leverage You're gonna look at those in the money options To to be more conservative have a lower cost basis still that five strike is still two to one leverage So it still doubles your upside and also doubles your downside if you buy the 11 11 strike your overpaying 62 cents for the premium and you start making profits from from 11 plus the 62 From there on you make money. So that might not be a bad choice For some some people and you can't lose more than the premium and that's just for calls This is just strike selection the next video. I'm gonna cover how each different month behaves So that's another variable the strikes behave differently and then the months over time they behave differently Why don't you follow and you can see the next one?