 There's a reason why Xtrades is currently the fastest growing application on the market for sharing financial ideas. With over $2.5 million paid in the last two years to contributors, users are flocking to see what trades the top traders on the leaderboard are sharing in real time. If you're looking to grow your reputation as a trader on the internet, or discuss your trading ideas with other reputable investors, click the link below and get connected with the trading mentor today, completely free of charge. If you're looking to grow your reputation as a trader, click the link below and get connected with the trading mentor today. If you're looking to grow your reputation as a trader, click the link below and get connected with the trading mentor today. This actually confuses a lot of people and most people don't actually wait for the option to expire. This is a very important definition, but it's not actually used for the type of trading that we do. We do mostly day trading or scalping with the options, so this is completely irrelevant for us. What we want to know, the key thing to know is call options should be used when you're bullish on the stock, pull options should be used when you're bearish on the stock, and why buy options over shares. With call options, we get a much better risk reward ratio, so there's a certain premium that you pay for the call option, so let's say it's $0.65. Call options are like this, so they're not actually $0.65. This means $65 because you buy 100 of these because one contract is equal to 100 shares, so that's how it works. When you buy a contract, it has unlimited potential, unlimited upside, so if you think a stock is going to go up very quickly in a short period of time, then you would want to buy an option over a share. For example, if the stock price moves $1, the option could move $2 instead of $1. So that's the reason you want to buy an option over a share. The options move much more quicker, and they have a much, yeah, like if the share only moves $1, then if you buy a share, then you're only going to get $1 profit, but with an option, you get $2 profit, and again, $2, so if it becomes $2.65, then that's equivalent to $2.65. That's the $200 profit. But yeah, that's how options work, and there's in the money, out the money, and at the strike price, so if the current stock is at $50 and you're buying a $50 option, then that's at the money, and out of the money is when you're buying above the current strike price, so $55, if the stock's at $50 and you're buying a $55 strike price option, then that's out of the money and same thing for in the money, so if you're buying a $45 strike price, that's in the money. So that's in the money, out of the money, out of the money, and yeah, if you think the price of a stock is going to rise, then you would want to buy an option and same thing for a put option, but reverse direction. So yeah, let's review the summary. In summary, a call option is used when you think that the stock price is going to go up versus a put option is going to be used when you expect the stock price to go down. And yeah, both options provide flexibility and risk management and various investment strategies. And yeah, you can buy these options to sell, you can buy and sell these options, and they can also be used to hedge. So this is something that we haven't talked about in previous videos, but so let's say you have $200, let's say you have 200 shares, and that's a lot of risk for your portfolio $200 shares of like, let's say Tesla, right? So you could buy a put option to hedge your position. So if you think Tesla is a very good long term stock, but in the near term, you see some downside potential. So short term you see your bearish on Tesla, but long term you're bullish, then you can hold on to those shares and then hedge your position by using a put option, right? And yeah, that's basically how you can hedge your position using options. And you can also generate income using options to cover calls or cash secured puts. But yeah, that's pretty much it for this video. I hope this was helpful. And I hope I was able to explain it well. And feel free to DM me if you guys have any questions or feel free to leave any comments on this video. Thank you. Here's a reason why Xtrades is currently the fastest growing application on the market for sharing financial ideas. With over $2.5 million paid in the last two years to contributors, users are flocking to see what trades the top traders on the leaderboard are sharing in real time. If you're looking to grow your reputation as a trader on the internet or discuss your trading ideas with other reputable investors, click the link below and get connected with the trading mentor today completely free of charge.