The Velocity of Money

The Secret Blue Print of Options Trading
2009 Tang www.OptionsLearn.com 1

All Rights Reserved

From: Tang

Congratulations for Taking Action!

In this report, we will be giving you a brief introduction to Options.

On a fundamental background, there are 2 core questions on money:
(1) How much can I make?
(2) How fast can I make it (the velocity of money)?

The reason for trading options is to gain a higher velocity of money. For the
same timeframe and stock market circumstances, options allow us to leverage
our resources to get more money faster.

This brief report on Options and the Velocity of Money intends to demonstrate
how options can be a more superior tool to stocks when it comes to velocity of
money.

My hope is that when you own the The Secret Blue Print of Options Trading,
you will have a more complete road map that outlines a simple and effective way
for you to trade options to get you to your financial goals faster.

Remember, when it comes to money, its not only how much, but how fast as
well.

Warmest Regards
Tang

PS: A List of Very Important References is given at Page 17
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You may use this report as you wish as long as it
remains unaltered and all links are left intact resell,
distribution, bonus, giveaway rights are all included

Copyright Tang 2009 www.OptionsLearn.com

ALL RIFHTS RESERVED: No part of this publication may be transmitted, reproduced or copied in
any form whatsoever, electronic, mechanical, including photocopying, faxing, recording or by any
information storage or retrieval system without the express permission (written, signed and dated)
by the author(s).

IDSCLAIMER AND/OR LEGAL NOTICES:
The information presented herein represents the view of the author as of the date of publication.
Because of the rate at which conditions change, the author reserves the right to alter and update his
opinion based on the new conditions. This report is for informational purposes only. While every
attempt has been made to verify the information provided in this report, neither the author nor his
affiliates/partners assume any responsibility for errors, inaccuracies or omissions.

Any slights of people or organizations are unintentional. If advice concerning legal, financial or
related matters is needed in any way connected with this publication, the services of a fully qualified
professional should be sought. This report is not intended for use as a source of legal, financial or
accounting advice in any way. You should be aware of any laws which govern business transactions
in your country and/or state. Any reference to any person or business whether living or dead is
purely coincidental.

U.S. Government Required Disclaimer - Options trading has large potential rewards,
but also large potential risk. You must be aware of the risks and be willing to accept
them in order to invest in the options markets. Don't trade with money you can't afford to
lose. This article and/or website is neither a solicitation nor an offer to Buy/Sell options.
No representation is being made that any account will or is likely to achieve profits or
losses similar to those discussed on this article / website. The past performance of any
trading system or methodology is not necessarily indicative of future results.

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1. Stocks
There are 2 ways to make money using stocks:
(a) Buy low, sell high
(b) Sell high, buy low

Chart 1: Buy Low, Sell High Chart 2: Sell High, Buy Low

Example 1 - Buy Low Sell High:
Buy 100 shares of Apple at $ 99.27 (invest $9,927)
Sell 100 shares of Apple at $120 (get $12,000)
Profit =$2,073
ROI =2,073 / 9,927 =21%

Example 2 - Sell High Buy Low:
Sell 100 shares of Apple at $99.27 (short sell) (get $9,927)
Apple shares drop.
Buy 100 shares of Apple at $80 (give back $8,000)
Profit =$1,927
ROI =1,927 / 9,927 =19.41%
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2. Options

Options are: (1) Standardized Contracts based on (2) an Underlying Stock. It
is (3) a Derivative Product with (4) a Limited Life.

Stocks are not the same as Options

Stocks Options
Investment in Real Company Standardized contracts
Value of Stock backed by Companys
Assets
Value of Option depends on current
stock price
Indefinite Life Limited life
Life depends on Companys life Life depends on Expiration Month

Options are standardized contracts.
Every option is standardized to control 100 shares of stock.
This gives options a leveraging effect.
So when we buy 4 option contracts at $10 each, we invest $4,000 (4
contracts x $10 per option x 100 shares per option contract).

In an options standardized contract, a third party called the O.C.C. (Options
Clearing Corporation) steps in:
The buyer buys from the OCC, while ...
The seller sells to the OCC
The buyer and the seller does not deal directly with one another since
the OCC is their point of contact and contract.
The OCC is the regulatory body which manages the options expiration date.

All Rights Reserved

Sample Option Table for Apple (nc (AAPL)
Source: Optionsxpress
All Rights Reserved
3. Call Options

There are 2 types of options:
(a) Call Options
(b) Put Options

When we buy a call option:
Buyer pays a premium (to own the call option).
Buyer of call has the right, but not the obligation, to buy the stock at the
agreed strike price
Buyer has only got this right until the expiration date
Buyer loses this right after the expiration date

When we buy call options:
If the underlying stock price goes up, we make money.
If the underlying stock price goes down, we lose money.

Example 3 - Buy Call Options:

AAPL is at $99.27. We buy 90 Strike Call @ $12 (invest $1,200)

(1) Say AAPL stock goes up to $120 (increase of $20 approx)
90 Strike Call is now @ $32 ($12 +$20) (get $3,200)
Profit =$2,000
ROI =2,000 / 1,200 =167%

(2) But If AAPL goes down to $80,
90 Strike Call reduce in value to $4 (approximate price)

This concept is illustrated below.

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Buy Call Options

When Stock Price Up, Call Options Make Money

Price

110
120
99.27
90
Call Option
increases in
Value
(Make $$$)
X
X
O
Call Option
Initial Value
O
Buy 90 Strike Call Option
Share Price

Time
X =Share Price
O =90 Strike Call Option
All Rights Reserved

Buy Calls Options

When Stock Price Goes Down, Call Options Lose Money

Price

80
110
90
120
99.27
X
X
O
Call Option
Initial Value
O
Call Option
Lose Value
(Lose $$$)
Share Price

Buy 90 Strike
Call Option
Time
X =Share Price
O =90 Strike Call Option
All Rights Reserved

4. Put Options

When we buy a put option:
Buyer pays a premium to own the put option.
Buyer of the put has the right, but not the obligation, to sell the stock at the
agreed strike price
Buyer has only got this right until the expiration date
Buyer loses this right after the expiration date

When we buy put options:
If the underlying stock price goes down, we make money.
If the underlying stock price goes up, we lose money.

Example 4 - Buy Put Options:

AAPL is trading at $99.27. We buy 110 Strike Put @ $10 (invest $1,000)

(1) Say AAPL stock goes down to $80 (drop of $20 approx)
110 Strike Put is now @ $30 ($10 +$20) (get $3,000)
Profit =$2,000
ROI =2,000 / 1,000 =200%

(2) But if AAPL goes up to $120
110 Strike Put Option reduce in value to $4 (approximate price)

This concept is illustrated below.
All Rights Reserved

Buy Put Options

When Stock Price Goes Down, Puts Make Money

Price

120
X
X
Time
Put Option
Initial Value
X =Share Price
=110 Strike Put Option (option always has a strike price)
90
99.27
Put Option
increases in
Value
(Make $$$)
Share Price
110
Buy 110 Strike
Put Option
80
All Rights Reserved

Buy Puts Options

When Stock Price Goes Up, Put Lose Money
Price

120
X
Put Option
Lose Value
(Lose $$$)
X
Share Price
Put Option
Initial Value
X =Share Price
=110 Strike Put Option (option always has a strike price)
90
99.27
110
Buy 110 Strike
Put Option
Time
All Rights Reserved

5. Option Advantage

Buying Options allow us to participate in the stock/capital markets:
(a) With reduced capital,
(b) With reduced risk,
(c) With unlimited upside capital,
(d) With higher ROI potential,
(e) Giving us higher velocity of money.

Example 5: Stock Goes Up

The results from Example 1 and 3 are tabulated below:

Stock Option
Example # Example 1 Example 3
Apple starting price $ 99.27 $ 99.27
Apple ending price $ 120 $ 120
Investment Vehicle Stock Buy 90 Strike Call
Initial Capital $ 9,927 $ 1,200
Profit $ 2,073 $ 2,000
ROI 21% 167%

Summary of results for Stocks going up:
(a) Options allow us to start with smaller capital ($1,200 v $9,927)
(b) Options gives us higher Return on Investment (167% v 21%)
(c) Options gives us higher velocity of money (167% v 21% over same period)

All Rights Reserved

A similar result is observed for stocks going down.

Example 6: Stock Goes Down

The results from Example 2 and 4 are tabulated below:

Stock Option
Example # Example 2 Example 4
Apple starting price $ 99.27 $ 99.27
Apple ending price $ 80 $ 80
Investment Vehicle Stock Buy 110 Strike Put
Initial Capital $ 9,927 $ 1,000
Profit $ 1.927 $ 2,000
ROI 19% 200%

Summary of results for Stocks going down:
(a) Options allow us to start with smaller capital ($1,000 v $9,927)
(b) Options gives us higher Return on Investment (200% v 19%)
(c) Options gives us higher velocity of money (200% v 19% over same period)
All Rights Reserved
Final Words.

Wow. You have just discovered more about Options and the Velocity of Money.
I hope that you got tremendous value from it!

Heres what you can expect from The Secret Blue Print of Options Trading:
PART 1: TAKE ACTION FIRST
Chapter 1: Lets Do It!
Chapter 2: Trading Rules
Chapter 3: Setting Goals
PART 2: THE TRADER
Chapter 4: The Core: Return on Investment (ROI)
Chapter 5: The Game Plan
Chapter 6: The Trading Mindset
PART 3: STOCK TRADING
Chapter 7: Trading Basics
Chapter 8: Trading Systems
Chapter 9: Entries and Exits
PART 4: SELECT OPTIONS
Chapter 10: Option Basics
Chapter 11: Option Mechanics
Chapter 12: Option Pricing
Chapter 13: Option Strategies
PART 5: GET READY
Chapter 14: Trading Plan
Chapter 15: Lets Do It Again!

Remember, when it comes to money, its not only how much, but how fast.

Warmest Regards,
Tang
All Rights Reserved

Get Your Copy of The Secret Blue Print of Options Trading
Today from www.OptionsLearn.com

As this manual is Downloadable, you can be reading it as fast as
5 minutes from now! Act Fast!
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LIST OF IMPORTANT REFERENCES
Do check out these cutting-edge options trading resources
Roboform
Trading Trainer
Trading Trainer Education Center
Trading Trainer Intensive Seminar
Trading Trainer Apprentice Program
Market Mastery
Profits Run
TeleCharts
Options University: Options Mastery Program
Options University -Options 101 Program
www.interactivebrokers.com
www.thinkorswim.com
www.optionsxpress.com
https://us.etrade.com
www.trading-plan.com
www.iitm.com
www.equis.com
www.meta-formula.com
www.optionsclearing.com
www.cboe.com
http://www.optionsxpress.com/tool_center/virtual_trade.aspx
https://www.thinkorswim.com/tos/displayPage.tos?webpage=paperMoney

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The Secret Blue Print of Options Trading

2009 Tang www.OptionsLearn.com 1

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