How a Premium Seller Really Reads the Option Chain

A clean beginner lesson on extrinsic value from Dr. Jim Schultz, a short-premium trader. He breaks it into three components, starting with the most important idea: an out-of-the-money option's entire price is 100% extrinsic value. Using Amazon into earnings, he shows how an out-of-the-money 235 put at roughly 30 delta might sell for about 7 dollars, all of it extrinsic. Then he sells that put to show the mechanics: your max profit is the credit you collect, your max risk runs down toward zero. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 Focusing on extrinsic value awareness 00:30 A quick look at the market 01:40 Using Amazon into earnings 02:20 Speaking as a premium seller 03:10 The most important thing to understand 03:50 Out-of-the-money puts and calls 04:40 That price is 100% extrinsic value 05:30 Selling the 235 put as our example 06:10 Max profit is your credit collected 06:40 Max risk runs down toward zero #tastylive #knowyouroptions #jimschultz #extrinsicvalue #sellingputs #premiumseller #optionsforbeginners #optionseducation #optionstrading #stockmarket tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.