options

trading
starter kit
A beginners guide to
understanding options
and making your first
profitable trade!
IMAGINE HOW IT WILL
FEEL...

...to have a fun, flexible options trading

side hustle. One that you can do from
anywhere, on your own time. Not only
will you have an extra income stream to
rely on in these uncertain times, but it
will be a very time-efficient side gig you
can do anytime, anywhere.

I'm talking whipping open your laptop

in a coffeeshop in France, Bali, Mexico
(or wherever you are!) and create an
income on your own terms.

With an understanding of options trading, you'll also be able to generate a

return whether the market is going up, down, or sideways, and use money-
making strategies that until now, only the financial elite knew about.

Rather than holding your breath waiting for the next big market apocalypse,
you can generate consistent cashflow every single week, no matter what the
market is doing:

1
GETTING STARTED
WITH OPTIONS TRADING

A solid understanding of options trading starts with

wrapping your head around these three things:

1. What is an option?
2. What are the types of options?
3. What are the ways to make money with options?

I'm going to walk you through THE FUNDAMENTALS,

step-by-step in this Starter Kit. Let's go!

2
part
01 WHAT IS AN OPTION?

First things first... what the HECK is an option? Let's start with the
textbook definition:

"An option is a contract between two parties for the purchase or

sale of an asset at a specific price, by a specific date."

If you're anything like me though, textbook definitions don't do

much for you.

So let's break it down!

HOW AN OPTIONS CONTRACT WORKS

STOCK

STOCK X

Justin Jaclyn

Let's say that on Dec 1, Stock X is trading at $50/share and Justin and Jaclyn
make the following agreement:

Justin can buy 100 shares of Stock X from Jaclyn for $100/share at any
time on or before Dec 30. So regardless of what Stock X is trading for on
the stock market, if Justin wants, he can buy 100 shares from Jaclyn for
$100/share. In order for Justin to have this right, (and as compensation
for the obligation Jaclyn is taking on) Justin pays Jaclyn $15.

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This agreement can be dissected into four components:

1. Underlying Asset: Stock X

2. Strike Price: $100
3. Expiry Date: Dec 30
4. Premium: $15

STOCK

STOCK X

Justin Underlying Asset: Stock X

Jaclyn
(Option Buyer) Strike Price: $100 (Option Seller)
Expiry Date: Dec 30
Premium: $15

In exchange for $15, Justin has the right

Premium

to buy Stock X for $100/share from

Underlying Asset Strike Price

Jaclyn any time on or before Dec 30.

Expiry Date

Justin (Option Buyer) Jaclyn (Option Seller)

pays the $15 premium collects the $15 premium
has the right to buy the has the obligation to sell
underlying asset from the underlying asset to
Jaclyn at $100/share Justin at $100/share

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Great job! Now it's time to test your knowledge with a short quiz 😊

QUIZ

1. The ______________ has the right and pays the premium.

a. Option buyer
b. Option seller

2. The ______________ has the obligation and collects the premium.

a. Option buyer
b. Option seller

3. Every option contract has these 4 components ___________,

___________, ___________, and ___________.
a. Underlying Price, Profit, Expiry Date, Strike Price
b. Underlying Asset, Strike Price, Expiry Date, Premium
c. Strike Price, Buyer, Seller, Loss

Answers
1. a
2. b
3. b

5
 part
02 WHAT ARE THE TYPES OF OPTIONS?

Now it's time to learn about the 2 different types of options...

Calls vs. Puts! First, think of them from the perspective of buyers:

Call Option - Gives buyers the right to buy the underlying asset
at a specific price, by a specific date.

Put Option - Gives buyers the right to sell the underlying asset
at a specific price, by a specific date.

The difference between calls/puts can be summarized by the

following grid:

CALL PUT

right right
BUY

to buy to sell

you pay premium you pay premium

obligation obligation
SELL

to sell to buy

you collect premium you collect premium

The key takeaway is that regardless of whether it's a Call or Put, an option buyer PAYS
premium, and an option seller COLLECTS premium. Just like in the real world, when you
buy something you pay for it; when you sell something you collect money for it.
Or, said differently; whatever is true for the buyer, it's the inverse/opposite for the seller.

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Great job! Now it's time to test your knowledge with a short quiz 😊

QUIZ

1. A Call option buyer has the right to ______ the underlying asset.
a. Buy
b. Sell

2. A Put option buyer has the right to ______ the underlying asset.
a. Buy
b. Sell

3. Since whatever is true for the buyer is the inverse/opposite for

the seller, with a Call option, the buyer has the right to _______ and
the option seller has the obligation to _______.
a. Buy, Sell c. Buy, Buy
b. Sell, Buy d. Sell, Sell

4. Since whatever is true for the buyer is the inverse/opposite for

the seller, with a Put option, the buyer has the right to _______ and
the option seller has the obligation to _______.
a. Buy, Sell c. Buy, Buy
b. Sell, Buy d. Sell, Sell

Answers
1. a
2. b
3. a
4. b

7
part HOW DO YOU MAKE MONEY WITH
03 OPTIONS?

So far, you learned what an option is, and that there's 2 types of
options: Calls or Puts.

But so what, right? Show me the monayyy!

Here's the deal: There are only TWO things you can do with an
option: sell it or buy it.

And since there are only TWO types of options (Calls or Puts), that
makes FOUR possible trades:

CALL PUT

BULLISH BEARISH
BUY

you think market will go ↑ you think market will go ↓

SELL

BEARISH BULLISH

you think market will go ↓ you think market will go ↑

These 4 trades are the foundation of all money-making options

trades, so let's dive in a little deeper!

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 TRADE #1: BUYING A CALL

Remember Justin? Let's say he's bullish and bought the below Call option on Dec1:

1. Underlying Asset: Stock X

2. Strike Price: $100
3. Expiry Date: Dec 30
4. Premium paid: $15

SCENARIO A:
PRICE OF UNDERLYING ASSET

if stock X goes up,

$150 Justin makes money!

right to buy
$100 at this price

SCENARIO B:
$ 50 if stock X goes down,
Justin loses money!

DEC 1 TIME DEC 30

If stock X goes UP to $150, Justin will use (aka EXERCISE in options lingo) his
right to buy at $100, pocketing the difference between the Strike Price and
Market Price less the Premium he paid.

$150 - $100 - $15 = + $35

Market Price Strike Price Premium Paid Justin's Profit

If stock X goes DOWN to $50, Justin won't exercise his right to buy at $100,
resulting in the option expiring worthless and losing the Premium he paid.

- $15
Justin's Loss (only the premium he paid)

9
 TRADE #2: SELLING A CALL

Now let's look at Jaclyn, who's bearish and sold the Call option to Justin on Dec 1:

1. Underlying Asset: Stock X

2. Strike Price: $100
3. Expiry Date: Dec 30
4. Premium collected: $15
PRICE OF UNDERLYING ASSET

SCENARIO A:
if stock X goes up,
$150 Jaclyn loses money!

$100
obligation to sell
at this price

SCENARIO B:
$ 50 if stock X goes down,
Jaclyn makes money!

DEC 1 TIME DEC 30

If stock X goes UP to $150, Justin will exercise his right to buy at $100,
obligating Jaclyn to sell to him at $100. Jaclyn's loss is the difference between
the Market Price and Strike Price, partially offset by the Premium she collected.

$150 - $100 + $15 = - $35

Market Price Strike Price Premium Collected Jaclyn's Loss

If stock X goes DOWN to $50, Justin won't exercise his right to buy at
$100, resulting in the option expiring worthless and Jaclyn being able to
walk away with the Premium she collected.

+ $15
Jaclyn's Profit (only the premium she collected)

10
TRADE #3: BUYING A PUT

Now it's time to talk about Puts. Let's say that this time, Justin bought a Put
option instead of a Call option because he's bearish:

1. Underlying Asset: Stock X

2. Strike Price: $100
3. Expiry Date: Dec 30
4. Premium: $15

SCENARIO A:
PRICE OF UNDERLYING ASSET

if stock X goes up,

$150 Justin loses money!

right to sell at
$100 this price

SCENARIO B:
$ 50 if stock X goes down,
Justin makes money!

DEC 1 TIME DEC 30

If stock X goes UP to $150, Justin won't exercise his right to sell at $100,
resulting in the option expiring worthless and losing the Premium he paid.

- $15
Justin's Loss (only the premium he paid)

If stock X goes DOWN to $50, Justin will exercise his right to sell at $100,
pocketing the difference between the Strike Price and Market Price less the
Premium he paid.

$100 - $50 - $15 = + $35

Strike Price Market Price Premium Paid Justin's Profit

Your paragraph text

11
TRADE #4: SELLING A PUT

Now let's look at Jaclyn, who sold the Put option:

1. Underlying Asset: Stock X

2. Strike Price: $100
3. Expiry Date: Dec 30
4. Premium: $15
PRICE OF UNDERLYING ASSET

SCENARIO A:
if stock Xgoes up,
$150 Jaclyn makes money!

obligation to buy
$100 at this price

SCENARIO B:
$ 50 if stock X goes down,
Jaclyn loses money!

DEC 1 TIME DEC 30

If stock X goes UP to $150, Justin won't exercise his right to sell at $100,
resulting in the option expiring worthless and Jaclyn being able to walk away
with the Premium she collected.
+ $15
Jaclyn's Profit (only the premium she collected)

If stock X goes DOWN to $50, Justin will exercise his right to sell at $100,
obligating Jaclyn to buy from him at $100. Jaclyn's loss is the difference between
the Market Price and Strike Price, partially offset by the Premium she collected.

$50 - $100 + $15 = - $35

Market Price Strike Price Premium Collected Jaclyn's Loss

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Great job! Now it's time to test your knowledge with a short quiz 😊 Feel free to
refer back to the illustrations to help you think through your answer!

QUIZ

1. If you think the market will go up, you could either:

a. Buy a Call or Sell a Put
b. Buy a Call or Buy a Put

2. If you think the market will go down, you could either:

a. Buy a Put or Sell a Call
b. Sell a Call or Sell a Put

3. If the stock moves against you as an option buyer, your loss is

the __________.
a. Strike Price
b. Premium paid
c. Premium collected

4. If the stock moves in your favor as an option seller, your profit is

the __________.
a. Strike Price
b. Market Price
c. Premium collected

Answers
1. a
2. a
3. b
4. c

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 printable cheatsheet
Below is a printable cheat sheet that summarizes everything you just learned.
Tape it to your wall, and tattoo it onto your body! You'll find yourself referring
back to it again and again each time you place an option trade. Heck, even after
8 years of options trading, I still find this visual extremely helpful. If you
understand this grid, you are ready to start making an income with options!

CALL PUT

BULLISH ↑ BEARISH ↓
BUY

right to buy right to sell

pays premium pays premium

BEARISH ↓ BULLISH ↑
SELL

obligation obligation
to sell to buy

COLLECTS COLLECTS
premium premium

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WHAT IT'S LIKE BEING AN OPTIONS TRADER

Knowing how to trade options brings in an *almost*

effortless $1K+ or more for me each month. Unlike other
side gigs where you have to hustle for hours and hours on
top of your 9-to-5 in exchange for a measly amount of
dollars, an options trading side hustle allows you to
generate income in the comfort of your PJs, wherever you
are in the world.

An options trading side hustle is

PERFECT for busy 9-to-5ers who
are ready to generate an
additional income that doesn't
add to your already loaded
schedule.

You’re also perfect for options

trading side if you want access to
the same money-making tools &
"unfair advantage" in the stock
market that the rich have.

WHEN IT COMES TO HAVING MORE CONTROL OVER

YOUR PORTFOLIO AND GENERATING CONSISTENT
CASHFLOW IN A TIME-LEVERAGED WAY, THERE’S
NOTHING THAT COMPARES TO OPTIONS TRADING.

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Trading options is the single most powerful and strategic way to have more
freedom, control, and flexibility in your life.

Whether you want to have more control over your portfolio during these times of
huge market uncertainty, start a lucrative side business that can one day replace
your full-time income, or just make a little extra money to pay off debt faster,
YOU get to decide what you want out of this. With very volatile and uncertain
times ahead for the stock market and the economy, having more skills/tools at
your disposal and next-level financial education is more important than ever.

In short, now's the time to start learning how to trade options.

Stick with me and I’ll show you how to do it SAFELY and STRATEGICALLY. Once
you understand the basics that we covered in this starter kit, it's not a big jump
for you to start generating consistent cashflow with options, every single week.

Rose
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thank you!

Learn more at
rosehan.com/optionstrading