Market Rebellion Education

Market Rebellion offers in-depth trader education, coaching and mentoring – from beginner to advanced – to help you build the knowledge base and practical skills to trade with confidence.

Welcome to Options School 101

Lead Instructor Bill Johnson is a renowned trading educator who’s authored numerous books on markets and finance. Now, he’s built Options School 101 to help you learn the core concepts and fundamentals of options trading — including basics of technical analysis, specific options strategies, and how to manage your trades.

Options Trading: Direction, Magnitude, and Speed

Trading options requires more than thinking the stock’s price will rise or fall. In addition, options traders must account for how much the stock will move and how aggressively.

Calls and Puts: The Building Blocks of All Options Strategies

Options strategies come in dozens of shapes and sizes, but they’re all built on two basic positions—calls and puts.

Profit & Loss Diagrams

Options traders can have bullish, bearish, or neutral views. Each strategy carries different risks and rewards, and the best way to understand them is to visualize them with profit and loss diagrams.

Options vs. Stock: The Option Advantage

Options provide many advantages over stock: limited risk, increased ROI, better cash efficiency, safer alternative to shorting stock, and the ability to roll.

Volatility & Options

For stock traders, volatility is a measure of risk. For options traders, it’s the main measure of value. Why do option prices rise when volatility rises? How should traders account for volatility before placing trades?

Four Types of Options Positions

Options strategies fall into one of four categories: speculation, hedging, spreads, and combinations. What are the differences and what are the advantages?

Option Greeks

Options have different risks than stocks, which are measured by the Greeks: delta, gamma, theta, vega, and rho. What are these risk measures and why are they important?

The Risk-Reward Connection

Once you understand the risk-reward connection, you’ll see why no strategy can be “better” than another. Options trading is about finding the right level of risk and reward—not the “perfect” strategy.

Rolling Options

Rolling a position is one of the strongest forms of risk management. What is rolling, and why does it give options traders an advantage over stock traders?

Unusual Option Activity

We pioneered Unusual Option Activity, an order flow strategy geared to follow the “smart money” — looking at where options are being bought compared against “normal” levels.

Open Interest

Options traders must specify if they’re “opening” or “closing” a position, and these will change the “open interest” for a particular expiration and strike. What is open interest and how does it change?

Candlesticks

Candlesticks are a type of charting style that allow traders to get better insights into potential turning points in the market to help traders with decisions. What are candlesticks and how do you read them?

Bill Johnson

Lead Instructor

With more than 25 years of financial and education experience, Bill Johnson serves as the Head of Options Education at Market Rebellion.

Options Strategies

Options provide traders with a variety of different strategies designed to match their specific time frames and financial goals. They’re the building blocks to how we trade at Market Rebellion.

Long Call

Bullish
Buy Call

Bull Call Spread (Vertical Bull Spread)

Bullish
Buy 1 call, sell 1 call at higher strike OR sell 1 put, buy 1 put at lower strike

Covered Call (Buy-Write)

Bullish
Buy 100 shares of stock, sell 1 call

Protective Put (Synthetic Call)

Bullish
Buy 100 shares of stock, buy 1 put

Short Put

Bullish
Sell 1 put option

Long Butterfly Spread

Neutral
Buy 1 call, sell 2 calls at higher strike, buy 1 call at an even higher strike; all equidistant & same expiration

Short Butterfly Spread

Neutral
Sell 1 call, buy 2 calls at higher strike, sell 1 call at an even higher strike; all equidistant & same expiration

Long Straddle

Neutral
Buy 1 call and 1 put with the same strike price and expiration

Short Straddle

Neutral
Sell 1 call and 1 put with the same strike price and expiration

Long Strangle

Neutral
Buy 1 call and 1 put with different strike prices but same expiration

Short Strangle

Neutral
Sell 1 call and 1 put with different strike prices but same expiration

Long Condor

Neutral
Buy 1 call at a strike, sell 1 call at a higher strike, sell 1 call at even higher strike, and buy 1 call at even higher strike; all equidistant & same expiration

Short Condor

Neutral
Sell 1 call at a strike, buy 1 call at a higher strike, buy 1 call at even higher strike, and sell 1 call at even higher strike; all equidistant & same expiration

Calendar Spread (Time Spread)

Neutral
Buy 1 call at one expiration and simultaneously sell 1 call at the same strike with a shorter expiration (can also be created with puts)

Covered Put (Sell-Write)

Bearish
Short 100 shares of stock, sell 1 put

Long Put

Bearish
Buy put

Bear Put Spread (Vertical Bear Spread)

Bearish
Buy 1 put, sell 1 put at a lower strike OR sell 1 call, buy 1 call at higher strike

Protective Call (Synthetic Put)

Bearish
Short 100 shares of stock, buy 1 call

Collar

Bearish
Buy 100 shares of stock, simultaneously buy 1 put and sell 1 call

Short Call

Bearish
Sell 1 call option (WARNING: High Risk – Must Read)

One-on-One Coaching

Get in-depth answers to your individual questions. Learn how to find trading opportunities and, more importantly, how to enter, manage and exit those trades.

Stu Dorfman

Stu is a professional options trader with 40 years of experience trading on the floor of the Philadelphia Stock Exchange and serving on various exchange committees.

Elliot Katz

Elliot has nearly 4 decades of experience in stock and options markets, training countless institutional traders at the Chicago Board Options Exchange.

Scott Thorstensen

Known for building strong personal relationships with his students, Scott has spent the last 20 years teaching individual traders every angle of the options world.

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