Money & investing · course 66 of 105

Options Trading Inside Out

Understand any options position before you trade it, from what a contract really costs and profit at expiry to spreads, the Greeks, volatility and assignment. Never what to trade.

12 modules

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What it teaches

What calls and puts actually are, what a contract really costs (×100), profit and loss at expiry for all four single-option positions, breakevens and max loss, covered calls, cash-secured puts and protective puts, what assignment does to your account, why an option can lose money when you’re right on direction (theta, IV crush), and vertical spreads; then, optionally, put-call parity: synthetic positions, spotting a parity arbitrage, dividends, the American-option band and box spreads; and pricing models: binomial trees, Black-Scholes, delta, gamma, vega, theta, rho and how to use them on a position; multi-leg positions (straddles to ratio spreads); volatility (historical, implied, expected move, IV crush, skew); calendars, diagonals and LEAPS; and exercise, early assignment, SPX cash settlement and pin risk; and in practice: bid, ask and spread cost, market vs limit orders, sizing by max loss with your own budget, FINRA’s minimum margin on short options, and what IRS Pub 550 says about option gains and losses. The AI asks 3 questions, places you, shows a short rule card per module, then drills you one trade at a time and catches the classic mistakes by name (“you forgot ×100”, “you left out the premium”).

How long

About 70-110 drill rounds depending on your level and misses, plus a 15-item final test. Plan on 4-6 sessions of 20-25 rounds. 135 questions in all (113 drill items, 22 concept questions); optional M5 adds 27 (20 drill, 7 concept); M6 adds 31 (25 drill, 6 concept), M7 28 (23, 5), M8 13 (8, 5), M9 16 (13, 3), M10 16 (12, 4), M11 27 (21, 6), roughly one more session each. The tutor gives a one-line save code at the end of each session; paste it into a new chat to carry on.

The modules

12 modules, drilled one item at a time. The ones marked optional are offered along the way.

M0
What an option is
Rights, moneyness, contract cost, intrinsic/extrinsic
M1
Payoff at expiry (one option)
One option at expiry: P/L, breakeven, max loss/gain
M2
Stock plus an option (covered call, cash-secured put, protective put) and assignment
Covered call, cash-secured put, protective put, assignment
M3
Before expiry (closing trades, delta, theta, volatility)
Closing trades, delta, theta, IV
M4
Vertical spreads (defined risk)
Vertical spreads
M5
Put-call parity, synthetics, arbitrage and the boxoptional
Put-call parity, synthetics, arbitrage, dividends, American bounds, box spreads
M6
Pricing models and the Greeksoptional
Binomial trees, Black-Scholes, the Greeks, Greeks on a position, volatility units
M7
Multi-leg positions (straddles, strangles, butterflies, iron condors, collars, ratio spreads)optional
Straddles, strangles, butterflies, iron condors, collars, ratio spreads, position Greeks
M8
Volatility (historical vs implied, expected move, IV crush, skew)optional
Historical vs implied volatility, expected move, IV from a straddle, IV crush, skew
M9
Time decay, calendar and diagonal spreads, long-dated options (LEAPS)optional
Time decay, calendars, diagonals, LEAPS
M10
Exercise, assignment, dividends, index options and pin riskoptional
Expiry, early assignment and dividends, SPX cash settlement, pin risk
M11
In practice: quotes, spreads, order types, sizing, margin and tax factsoptional
Bid, ask, mid and spread cost, market vs limit orders, natural vs mid price on spreads, fees, sizing by max loss, FINRA margin on short options, what IRS Pub 550 says about option gains and losses

Before it teaches, it asks

1
What brings you to options: do you trade already, are you thinking of starting, or do you need it for work or an exam? And have you placed an options trade before?
AI voice (ElevenLabs)
2
The quote is $2.35. What do you pay for 1 contract?
3
You buy 1 contract of the ACME 50 call at $2.00. ACME closes at $54.50 on expiry day. Profit or loss?

What’s exact, and what isn’t

Show

Straight from the course’s own notes.

Exact: Every number in M5 (put-call parity, every payoff identity scanned at every cent from $0 to $400). Every number in M0, M1, M2 and M4 and the closing trades in M3, computed by script with exact decimal math (2026-10-08). Every max loss, max gain and breakeven was double-checked by scanning the profit/loss at every cent of stock price from $0 to $400; “unlimited” answers follow from the formula (no finite scan can show them).
Exact under the model: Every number in M6 (reproduces Hull’s Black-Scholes example, call 4.759422 / put 0.8085994, and his two-step American put, 5.0894; Greeks checked against finite differences). Real prices don’t follow the model exactly.
Exact at expiry / model / rules: M7: exact at expiry, every max, min and breakeven scanned, IG’s iron condor reproduced. M8 and M9: model values (Black-Scholes, r = 0) printed in the items. M10: rules from dated sources (SEC, Cboe, Interactive Brokers).
Exact / quoted: M11: exact arithmetic (every answer computed a second way); margin and tax facts quoted from dated sources (FINRA Rule 4210, IRS Pub 550 for 2025 returns).
Model, labeled: M3's delta and theta items use the simple one-force estimate (premium change ≈ delta × move, or theta × days). Real prices move with several forces at once.
Judgment: Word answers (rights, assignment, IV) are graded on the key facts listed in the bank.
Not in it yet: Your own taxes (M11 quotes IRS Pub 550's rules only), early-exercise math beyond M6's two-step American put and M10's dividend rule of thumb, cash-settled options other than SPX, assignment allocation. Real stock tickers and prices are never used; M10 uses the real SPX index’s rules with made-up levels.