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Essential Options Trading Guide
Options trading may seem overwhelming at first, but it’s easy to understand if you know a few key points. Investor portfolios are usually constructed with several asset classes. These may be stocks, bonds, ETFs, and even mutual funds. Options are another asset class, and when used correctly, they offer many advantages that trading stocks and ETFs alone cannot.
- An option is a contract giving the buyer the right, but not the obligation, to buy (in the case of a call) or sell (in the case of a put) the underlying asset at a specific price on or before a certain date.
- People use options for income, to speculate, and to hedge risk.
- Options are known as derivatives because they derive their value from an underlying asset.
- A stock option contract typically represents 100 shares of the underlying stock, but options may be written on any sort of underlying asset from bonds to currencies to commodities.
What Are Options?
Options are contracts that give the bearer the right, but not the obligation, to either buy or sell an amount of some underlying asset at a pre-determined price at or before the contract expires. Options can be purchased like most other asset classes with brokerage investment accounts.
Options are powerful because they can enhance an individual’s portfolio. They do this through added income, protection, and even leverage. Depending on the situation, there is usually an option scenario appropriate for an investor’s goal. A popular example would be using options as an effective hedge against a declining stock market to limit downside losses. Options can also be used to generate recurring income. Additionally, they are often used for speculative purposes such as wagering on the direction of a stock.
There is no free lunch with stocks and bonds. Options are no different. Options trading involves certain risks that the investor must be aware of before making a trade. This is why, when trading options with a broker, you usually see a disclaimer similar to the following:
Options involve risks and are not suitable for everyone. Options trading can be speculative in nature and carry substantial risk of loss.
Options as Derivatives
Options belong to the larger group of securities known as derivatives. A derivative’s price is dependent on or derived from the price of something else. As an example, wine is a derivative of grapes ketchup is a derivative of tomatoes, and a stock option is a derivative of a stock. Options are derivatives of financial securities—their value depends on the price of some other asset. Examples of derivatives include calls, puts, futures, forwards, swaps, and mortgage-backed securities, among others.
Call and Put Options
Options are a type of derivative security. An option is a derivative because its price is intrinsically linked to the price of something else. If you buy an options contract, it grants you the right, but not the obligation to buy or sell an underlying asset at a set price on or before a certain date.
A call option gives the holder the right to buy a stock and a put option gives the holder the right to sell a stock. Think of a call option as a down-payment for a future purpose.
Call Option Example
A potential homeowner sees a new development going up. That person may want the right to purchase a home in the future, but will only want to exercise that right once certain developments around the area are built.
The potential home buyer would benefit from the option of buying or not. Imagine they can buy a call option from the developer to buy the home at say $400,000 at any point in the next three years. Well, they can—you know it as a non-refundable deposit. Naturally, the developer wouldn’t grant such an option for free. The potential home buyer needs to contribute a down-payment to lock in that right.
With respect to an option, this cost is known as the premium. It is the price of the option contract. In our home example, the deposit might be $20,000 that the buyer pays the developer. Let’s say two years have passed, and now the developments are built and zoning has been approved. The home buyer exercises the option and buys the home for $400,000 because that is the contract purchased.
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The market value of that home may have doubled to $800,000. But because the down payment locked in a pre-determined price, the buyer pays $400,000. Now, in an alternate scenario, say the zoning approval doesn’t come through until year four. This is one year past the expiration of this option. Now the home buyer must pay the market price because the contract has expired. In either case, the developer keeps the original $20,000 collected.
Call Option Basics
Put Option Example
Now, think of a put option as an insurance policy. If you own your home, you are likely familiar with purchasing homeowner’s insurance. A homeowner buys a homeowner’s policy to protect their home from damage. They pay an amount called the premium, for some amount of time, let’s say a year. The policy has a face value and gives the insurance holder protection in the event the home is damaged.
What if, instead of a home, your asset was a stock or index investment? Similarly, if an investor wants insurance on his/her S&P 500 index portfolio, they can purchase put options. An investor may fear that a bear market is near and may be unwilling to lose more than 10% of their long position in the S&P 500 index. If the S&P 500 is currently trading at $2500, he/she can purchase a put option giving the right to sell the index at $2250, for example, at any point in the next two years.
If in six months the market crashes by 20% (500 points on the index), he or she has made 250 points by being able to sell the index at $2250 when it is trading at $2000—a combined loss of just 10%. In fact, even if the market drops to zero, the loss would only be 10% if this put option is held. Again, purchasing the option will carry a cost (the premium), and if the market doesn’t drop during that period, the maximum loss on the option is just the premium spent.
Put Option Basics
Buying, Selling Calls/Puts
There are four things you can do with options:
- Buy calls
- Sell calls
- Buy puts
- Sell puts
Buying stock gives you a long position. Buying a call option gives you a potential long position in the underlying stock. Short-selling a stock gives you a short position. Selling a naked or uncovered call gives you a potential short position in the underlying stock.
Buying a put option gives you a potential short position in the underlying stock. Selling a naked, or unmarried, put gives you a potential long position in the underlying stock. Keeping these four scenarios straight is crucial.
People who buy options are called holders and those who sell options are called writers of options. Here is the important distinction between holders and writers:
- Call holders and put holders (buyers) are not obligated to buy or sell. They have the choice to exercise their rights. This limits the risk of buyers of options to only the premium spent.
- Call writers and put writers (sellers), however, are obligated to buy or sell if the option expires in-the-money (more on that below). This means that a seller may be required to make good on a promise to buy or sell. It also implies that option sellers have exposure to more, and in some cases, unlimited, risks. This means writers can lose much more than the price of the options premium.
Why Use Options
Speculation is a wager on future price direction. A speculator might think the price of a stock will go up, perhaps based on fundamental analysis or technical analysis. A speculator might buy the stock or buy a call option on the stock. Speculating with a call option—instead of buying the stock outright—is attractive to some traders since options provide leverage. An out-of-the-money call option may only cost a few dollars or even cents compared to the full price of a $100 stock.
Options were really invented for hedging purposes. Hedging with options is meant to reduce risk at a reasonable cost. Here, we can think of using options like an insurance policy. Just as you insure your house or car, options can be used to insure your investments against a downturn.
Imagine that you want to buy technology stocks. But you also want to limit losses. By using put options, you could limit your downside risk and enjoy all the upside in a cost-effective way. For short sellers, call options can be used to limit losses if wrong—especially during a short squeeze.
How Options Work
In terms of valuing option contracts, it is essentially all about determining the probabilities of future price events. The more likely something is to occur, the more expensive an option would be that profits from that event. For instance, a call value goes up as the stock (underlying) goes up. This is the key to understanding the relative value of options.
The less time there is until expiry, the less value an option will have. This is because the chances of a price move in the underlying stock diminish as we draw closer to expiry. This is why an option is a wasting asset. If you buy a one-month option that is out of the money, and the stock doesn’t move, the option becomes less valuable with each passing day. Since time is a component to the price of an option, a one-month option is going to be less valuable than a three-month option. This is because with more time available, the probability of a price move in your favor increases, and vice versa.
Accordingly, the same option strike that expires in a year will cost more than the same strike for one month. This wasting feature of options is a result of time decay. The same option will be worth less tomorrow than it is today if the price of the stock doesn’t move.
Volatility also increases the price of an option. This is because uncertainty pushes the odds of an outcome higher. If the volatility of the underlying asset increases, larger price swings increase the possibilities of substantial moves both up and down. Greater price swings will increase the chances of an event occurring. Therefore, the greater the volatility, the greater the price of the option. Options trading and volatility are intrinsically linked to each other in this way.
On most U.S. exchanges, a stock option contract is the option to buy or sell 100 shares; that’s why you must multiply the contract premium by 100 to get the total amount you’ll have to spend to buy the call.
|What happened to our option investment|
|May 1||May 21||Expiry Date|
The majority of the time, holders choose to take their profits by trading out (closing out) their position. This means that option holders sell their options in the market, and writers buy their positions back to close. Only about 10% of options are exercised, 60% are traded (closed) out, and 30% expire worthlessly.
Fluctuations in option prices can be explained by intrinsic value and extrinsic value, which is also known as time value. An option’s premium is the combination of its intrinsic value and time value. Intrinsic value is the in-the-money amount of an options contract, which, for a call option, is the amount above the strike price that the stock is trading. Time value represents the added value an investor has to pay for an option above the intrinsic value. This is the extrinsic value or time value. So, the price of the option in our example can be thought of as the following:
|Premium =||Intrinsic Value +||Time Value|
In real life, options almost always trade at some level above their intrinsic value, because the probability of an event occurring is never absolutely zero, even if it is highly unlikely.
Types of Options
American and European Options
American options can be exercised at any time between the date of purchase and the expiration date. European options are different from American options in that they can only be exercised at the end of their lives on their expiration date. The distinction between American and European options has nothing to do with geography, only with early exercise. Many options on stock indexes are of the European type. Because the right to exercise early has some value, an American option typically carries a higher premium than an otherwise identical European option. This is because the early exercise feature is desirable and commands a premium.
There are also exotic options, which are exotic because there might be a variation on the payoff profiles from the plain vanilla options. Or they can become totally different products all together with “optionality” embedded in them. For example, binary options have a simple payoff structure that is determined if the payoff event happens regardless of the degree. Other types of exotic options include knock-out, knock-in, barrier options, lookback options, Asian options, and Bermudan options. Again, exotic options are typically for professional derivatives traders.
Options Expiration & Liquidity
Options can also be categorized by their duration. Short-term options are those that expire generally within a year. Long-term options with expirations greater than a year are classified as long-term equity anticipation securities or LEAPs. LEAPS are identical to regular options, they just have longer durations.
Options can also be distinguished by when their expiration date falls. Sets of options now expire weekly on each Friday, at the end of the month, or even on a daily basis. Index and ETF options also sometimes offer quarterly expiries.
Reading Options Tables
More and more traders are finding option data through online sources. (For related reading, see “Best Online Stock Brokers for Options Trading 2020”) While each source has its own format for presenting the data, the key components generally include the following variables:
- Volume (VLM) simply tells you how many contracts of a particular option were traded during the latest session.
- The “bid” price is the latest price level at which a market participant wishes to buy a particular option.
- The “ask” price is the latest price offered by a market participant to sell a particular option.
- Implied Bid Volatility (IMPL BID VOL) can be thought of as the future uncertainty of price direction and speed. This value is calculated by an option-pricing model such as the Black-Scholes model and represents the level of expected future volatility based on the current price of the option.
- Open Interest (OPTN OP) number indicates the total number of contracts of a particular option that have been opened. Open interest decreases as open trades are closed.
- Delta can be thought of as a probability. For instance, a 30-delta option has roughly a 30% chance of expiring in-the-money.
- Gamma (GMM) is the speed the option is moving in or out-of-the-money. Gamma can also be thought of as the movement of the delta.
- Vega is a Greek value that indicates the amount by which the price of the option would be expected to change based on a one-point change in implied volatility.
- Theta is the Greek value that indicates how much value an option will lose with the passage of one day’s time.
- The “strike price” is the price at which the buyer of the option can buy or sell the underlying security if he/she chooses to exercise the option.
Buying at the bid and selling at the ask is how market makers make their living.
The simplest options position is a long call (or put) by itself. This position profits if the price of the underlying rises (falls), and your downside is limited to loss of the option premium spent. If you simultaneously buy a call and put option with the same strike and expiration, you’ve created a straddle.
This position pays off if the underlying price rises or falls dramatically; however, if the price remains relatively stable, you lose premium on both the call and the put. You would enter this strategy if you expect a large move in the stock but are not sure which direction.
Basically, you need the stock to have a move outside of a range. A similar strategy betting on an outsized move in the securities when you expect high volatility (uncertainty) is to buy a call and buy a put with different strikes and the same expiration—known as a strangle. A strangle requires larger price moves in either direction to profit but is also less expensive than a straddle. On the other hand, being short either a straddle or a strangle (selling both options) would profit from a market that doesn’t move much.
Below is an explanation of straddles from my Options for Beginners course:
And here’s a description of strangles:
How to use Straddle Strategies
Spreads & Combinations
Spreads use two or more options positions of the same class. They combine having a market opinion (speculation) with limiting losses (hedging). Spreads often limit potential upside as well. Yet these strategies can still be desirable since they usually cost less when compared to a single options leg. Vertical spreads involve selling one option to buy another. Generally, the second option is the same type and same expiration, but a different strike.
A bull call spread, or bull call vertical spread, is created by buying a call and simultaneously selling another call with a higher strike price and the same expiration. The spread is profitable if the underlying asset increases in price, but the upside is limited due to the short call strike. The benefit, however, is that selling the higher strike call reduces the cost of buying the lower one. Similarly, a bear put spread, or bear put vertical spread, involves buying a put and selling a second put with a lower strike and the same expiration. If you buy and sell options with different expirations, it is known as a calendar spread or time spread.
Combinations are trades constructed with both a call and a put. There is a special type of combination known as a “synthetic.” The point of a synthetic is to create an options position that behaves like an underlying asset, but without actually controlling the asset. Why not just buy the stock? Maybe some legal or regulatory reason restricts you from owning it. But you may be allowed to create a synthetic position using options.
A butterfly consists of options at three strikes, equally spaced apart, where all options are of the same type (either all calls or all puts) and have the same expiration. In a long butterfly, the middle strike option is sold and the outside strikes are bought in a ratio of 1:2:1 (buy one, sell two, buy one).
If this ratio does not hold, it is not a butterfly. The outside strikes are commonly referred to as the wings of the butterfly, and the inside strike as the body. The value of a butterfly can never fall below zero. Closely related to the butterfly is the condor – the difference is that the middle options are not at the same strike price.
Because options prices can be modeled mathematically with a model such as the Black-Scholes, many of the risks associated with options can also be modeled and understood. This particular feature of options actually makes them arguably less risky than other asset classes, or at least allows the risks associated with options to be understood and evaluated. Individual risks have been assigned Greek letter names, and are sometimes referred to simply as “the Greeks.”
Below is a very basic way to begin thinking about the concepts of Greeks:
If You Do These 7 Things, You’ll Be Able To Achieve Any Goal You Set
“A bird doesn’t have a choice or need to be taught to fly thousands of miles and migrate back and forth, it’s just their success instinct. Humans are the only mammal that can successfully select it’s goals and that is the result of 4 billion years of evolutionary success. You’re successful just by being born — but it’s that sophistication that makes you get in your own way.
Goal actualization may be the biggest creator of man made frustration in our modern era.
You write them down.
Try to convince yourself.
But you’re missing something — and that something is the foundation to achieve them which I’ll provide in this piece.
I now understand the principles and psychology required to fulfill any goal I want.
What I’ve learned is that goal achievement is actually very efficient — you get what you pay for.
I wanted to be an entrepreneur so bad I put my life on the line to make it happen. I spent my life savings, I quit a job making $300k a year. I moved to the best cities to pull it off. I wanted it because I valued growth and personal development.
So, #1, decide how bad you actually want the goal.
You need to ask that question seriously.
Often when you set a goal, you actually don’t care for it as much as you believe.
It’s a nice to have, not a need to have.
In my writing class a few months ago, I told my coach I’d have 1000 new subscribers by the next call.
I’ve only hit 265 and we have our call coming up next Wednesday.
As you’ll read later, it turns out I didn’t want that goal bad enough and therefore didn’t set myself up to achieve it.
Now I’m scrambling to dig deep and get creative to hit my numbers.
I could have created those conditions earlier to better ensure it’s fulfillment however I just made up the goal arbitrarily and wrote it down like most of us do when we set goals.
To start, the foundation for achieving big goals takes three things:
If you don’t have all three, it’s hard to even set the right goals and people end up setting goals that are unrealistic as a result.
When you have that foundation , you can follow the seven steps to ensure every goal you have get’s achieved with certainty.
So what are the mindsets, skillsets and toolsets to ensuring a goal get’s actualized?
Let’s go through each one at a high level and dig into what we need to do to achieve a goal.
The most important part.
Your mindset ensures you have the skills to think correctly.
You need to be able to command your ego and recognize the difference between your ego self and your observer self.
This includes but isn’t limited to believing in yourself, having confidence, managing fears we all have — and an attitude that knows how to win.
Critical to have the skills to achieve the goal.
You can’t become a master writer if you don’t have the capacity to write well (practice every day) or don’t have anything interesting to write about (either first hand experiences or masterful creativity to connect dots that no one else has connected before).
Invest in your skill development and learning — the more the better.
The more you learn and experience, the more you master your skill.
To further hone those skills, you need to test your work in situations that matter. Ie. the market.
How often is you’re work being ‘battle tested’ or shipped? What’s the market saying?
You need a lot of that feedback. I’m currently launching a course on getting people to treat you how you want to be treated.
I’ve relentlessly written on the topic, faced the problem myself exhaustively, solved and overcame it for myself with coaching and the exact prescriptions I prescribe.
Most importantly, have validated the market watching my articles go viral (strong signal) and email sign ups.
In a nutshell, skill-set requires a lot of practice and experience — and it needs to get seen by the field and market itself.
The right tool set often means the right technology, capital or other help to deeply master your craft, understand the people you’re working with or selling to and reaching them (the market) in the best way you can.
Depending on how you look at it, tool set could be the least important though training is the most important.
In the context of personal goal setting to eventually acquire the toolset — those things requires creating the conditions and environment for what I call absolute resourcefulness.
Absolute resourcefulness ensures you find everything you need at the right time to accomplish the goal.
Absolute resourcefulness is the result of the right mental state and situation to achieve what you want.
For example, many amateurs think “having connections” is the key to success.
“If only Ashton Kutcher would share my article I’d go viral” or if so and so would introduce me to so and so who would make me successful by signing me or buying my product etc.”
The fact of the matter is, mentors will help anyone when they see promise and they feel like they look good by making an introduction for you.
In fact, they benefit by introducing the “up and coming start up” to the investor or the “up and coming film maker” to the producer.
So the question to ask yourself is:
“What can I do to make this person look like a star while helping me out?”
And that starts with the work.
Your job is to make them look cool by helping you and you’ll be able to get any introduction you want.
You connect with influencers by being valuable to them.
Ashton Kutcher shared this article of mine, and yes, one of my best friends was his co-founder at his media company, which at the time, was using his FB account to share viral news.
Though my friend got my foot in the door, by no means, and I repeat, by no means did he just send my article to Ashton to share it as a favor.
You should assume that doesn’t exist — and though nepotism does of course exist in various situations, it’s often way too costly.
Had I “forced” my best friend to shove the article down Ashtons throat to share it, he never would have helped me out again — and you always want to play the long game.
From the outset my friend told me given he has thirty people and needs to lead by example, he can’t play nepotistic favors and said my article would get tested like every other article.
If it tested well, they’d elevate it to the influencer pages which included Ashton’s FB with 18 million followers.
My article happened to be a very powerful piece that was trending on Medium, and was republished in the Ny Observer.
It was my entrepreneurial journey, and I had invested in exclusive art for it (which I still use for my writing today), so the piece was adding value to their site for sure.
Furthermore, when the piece ran prior to it elevating to Ashton’s page, I literally spent the whole day harassing every friend I had calling in every chip for them to share it.
It costed me a whole day of hustle.
Finally, I was sitting in a coffee shop where I was working from, and my email began getting flooded.
I looked up and I saw my article had been shared by Ashton Kutcher and looked at the follower number next to his name. It was over 18 million followers at the time.
This was the quote and screenshot shared.
I was so happy. I worked so hard for it and we had just finished building an app we were driving downloads too so watching 300 downloads come in was nice (even then only 300! Makes you realize how influential ‘influencers’ actually are?)
The point is that even with my dear friend being his actual business partner, I still had to earn it. You always have to earn it.
Always assume you’re going to have to earn it always and the only way to have someone help you is by helping them.
Absolute resourcefulness is the ultimate tool in the tool set.
Here are the principles for the right mindset, skillset and tool set to ensure every goal you put your mind to gets achieved.
2. Go All In With Crazy Uncertainty
Get scared, real scared. I used to be scared shitless when I’d spend money on myself whether it was a conference or a course or training for with limited funds in the bank.
You’d probably guess from my writing that I’m financially much more well off than I actually am, but my bank account isn’t flooded by any means and I’m still living on a lean budget.
I’m kicking off a new company and still investing heavily in myself but now I’m ready to accept the abundance the world has in store.
I’m ready to breakout.
This was my personal breakthrough whether it’s for my start up or for my new found fire with writing (because I invested in an expensive writing course).
This is because I’ve passed what Benjamin P. Hardy calls my point of no return — the point where you’re absolutely committed, and there’s no way of retreat.
It took me two years to finally appreciate and understand that this is an absolute must to get what you want.
If you have three months of runway in the bank and you fail, will you actually be homeless? Can you imagine the state of intensity that brings out of you?
Of course, some people actually would be homeless (disclaimer don’t go risking your family fortune because I said too) and I’m not trying to discount facts of poverty or anything else.
For the average fearful professional (used to be me), you need to get comfortable being uncomfortable.
Trust me, it’s never as scary in the moment as you project it will be whether it’s public speaking or cold approaching prospective mates.
I used to be scared talking to women. That fear of rejection was unfathomable for me. Literally after finally being forced to do it only twice, I realize it’s the easiest thing in the world and that rejection has nothing to do with me.
Even if it does, it’s likely not a good match either way but it took purging the fear to overcome it.
3. Invest In Yourself Like Your Life Depends On It
One of the biggest lessons I’ve learned is you don’t value what you don’t pay for.
When you invest in something, you make it a part of who you are and identify with it “as me”.
So the more you invest “in me”, the more you value yourself and therefore focused you become.
I just spent money on two courses and they’re bringing out the fire in me and I’m hitting my writing stride and breaking through in my business as a result (both courses were on both topics respectively).
Since the writing course began, I’ve published a long form piece every day which never happened until I invested in the course. Before that, I was slogging a long slowly but surely but never the intensity and fire I have now.
The best connections I ever made were from a conference I spent $5,000 on. My dad told me to save the money. Had I listened, I wouldn’t have met the contacts who I ended up becoming roommates with, and who had my article shared by Ashton Kutcher.
My friend just invested $100k in a mastermind group and I’m positive it will raise his profile and business to the world stage it deserves to be on.
Money always ends up becoming electronic numbers in a bank account.
Using it wisely by investing in yourself is tangible and priceless and returns itself in droves.
4. Possess The Confidence To Put Yourself Out There
Whether it’s talking to potential customers, public speaking or hitting publish, you need to be in a confident state of sharing yourself through your work.
If you’re worried about what people think or your brand and reputation, you don’t possess the confidence required to ensure your goal gets achieved.
This was a huge learning for me as I used to be obsessive over every single detail.
During my first start up, I badgered my co-founder about how we appeared in the press (it never even happened because I didn’t let it).
The fact is, no one cares or has time to care and people forget.
You’ll find the bolder your headline and more comfortable you are saying or doing something, the less people actually care.
I sat on my ‘boldest’ piece for a year because I was calling marriage a violent institution. I published it finally with the help of my coach and no one cared. Crickets. Literally have gotten ten likes since publishing July 1.
People like what’s familiar and comfortable and safe.
Meanwhile, this piece went viral immediately and has been liked by almost 1,000 people.
People generally don’t share the deep dark things they don’t talk about but agree with.
Part of why noone thought Donald Trump could win, but the silent majority quietly voted for him.
5. Declare Goals Publicly and Use Deadlines To Force Creativity and Resourcefulness
I have a goal to acquire 1,000 subscribers prior to my next coaching call in my writing course. I’ve only hit 265 so far.
With the call being five days away, am getting resourceful. I’m going to reach far and wide to hit the goal. Call in chips that I otherwise wouldn’t have.
Now, I didn’t set negative consequences if I missed the goal from the outset so perhaps I would have worked with more intensity from day one now that we’re approaching the goal.
But had I said “if I don’t hit this goal, I’ll give a charity I despise $1,000”, I would have worked with more fire. Imagine if I would have upped the ante and made it $5,000.
Now imagine if I made it $10,000 to the American Nazi party or ISIS or something horrible like that (thanks Tim Ferris for those recommendations).
Not that I’d do it but you get the point.
Yes, subscribers are important to me but they apparently aren’t important to “burn my boats and take the fucking island”.
I will make them so on the next one!
So the question is, how bad do you want your goal? What price are you willing to pay for it?
6. Measure and Report Goals And Have Someone Unbiased Hold You Accountable
“What you measure, you improve. What you report, you accelerate.” — Legendary Management Expert Peter Drucker
Having to report to someone else who doesn’t care for you personally creates a healthy fear that spurs action. This is the exact purpose of board meetings and goals set at each one.
Others holding you accountable don’t see all your hard work that give you moral high ground to miss, they just look at the results. So it forces you to be results oriented.
At the beginning of our start up, our seed investor who put up our first $500k had us do calls with him every two weeks.
I’d have to wake up for them every other Friday at 6am because I was based in San Francisco and he was on the East Coast.
We’d send a deck with activity updates and goals — and every one of us would show up for a meeting to talk about our activity.
This did two things:
When you’re live with an authority, you tend to make bolder goals and when you know you have to report them to everyone, you can bet you go out of your way to follow through.
Now that we’ve stopped those meetings as we’ve progressed through that incubation period with that investor, I’ve noticed a significant drop in urgency.
We haven’t written goals down and we don’t go to sleep every night knowing we’re reporting them in front of the tribe every other Friday morning.
Real force functions work and having an objective, results only oriented person hold you accountable is critical to achieve results and grow quickly.
7. Get Outside Help With Someone Who Has Achieved What You Want To Achieve
“Never take advice from someone you wouldn’t trade places with.” — Darren Hardy
To that end, get coached by someone who has achieved your goal. Only take advice from someone who you’d trade places with.
That ensures the decisions you make as a result of their advice comes from the right place. There are too many teachers who think they know what to do because of study though don’t know how to teach it when it matters because they only know the knowledge or material or don’t have the deep experience required to transfer their mastery over to you.
That’s why I think the best psychologists are entrepreneurs or winning marketers, not often psychologists themselves.
Entrepreneurs and marketers have to deeply understand what makes a human being tick to act, and what motivates them to spend hard earned money, have employees work for them for years, rely on them and more.
They have lead people when it matters and got them to buy things with a lot on the line.
The average practitioner whether it’s a psychologist or medical doctor or lawyer has generally been risk averse which is what led them down that traditional path in the first place.
They often haven’t put themselves out there in a way that exposes themselves to people and situations to deeply understand the trials, tribulations and challenges people go through and the complexity of the self that comes with it.
This is of course not all black and white and not to say doctors and psychologists can’t be entrepreneurs but thinking about the traditional path from college to practitioners to make a point (which most of them would agree with me on).
Some nuance here of course but you get the point.
Make plans to create the mindset, skill set and tool set to achieve your goals.
Create the conditions and context for absolute resourcefulness and accountability to bring the deep creativity and commitment required to achieve whatever goal it is you want.
Add a master coach and you’re guaranteed to hit every goal you set your mind to.
IELTS Writing Task 2 example answers
Practising IELTS Writing tasks 2
In this post, we’re going to look at some examples of answers to an IELTS Writing task 2 question and comment on their strengths and weaknesses. We’ll also talk about what the writer could do to get a better score in each case. The sample answers were written by course participants on the IELTS Preparation Course here at The London School of English. You can also see sample answers to a part 1 writing task in our previous blog post.
IELTS task 2 is the essay question. Here’s an example of a possible question, followed by two different answers.
Some people claim that not enough of the waste from homes is recycled. They say that the only way to increase recycling is for governments to make it a legal requirement. To what extent do you think laws are needed to make people recycle more of their waste?
In recent years, the household waste are considerably increasing. In addition, nobody try to fix the problem and call the government to solve it. Many people think that the authority should make some laws to maintain the recycling process. I will discuss about legal requirement as a way to increase recycling and the other ways.
Firstly, should it be compulsory for people to recycle their waste? The environmental issue is one of the main problem of our world and we don’t help it. Government should make some decisions about recycling and maybe put some taxes on income about this. For example, if you don’t respect the good bin or if you product too much waste you should be punish. Usually, people only do the right thing because of rules, so it might be possible to change a person as an eco-friendly. Moreover, instead of punishing people they could give people a reward for their good action or even a large number of recycled waste.
On the other hand, many ways could also enhance the responsibility to recycle. Laws are not the only outcome, there is also the way to reward someone. In Peking, people can change plastic bottle for underground ticket for example. This could be a reason that people recycle more and try to be more aware about ecology. In addition, in some countries the sensibilisation about recycling is well-known in school. Teachers are teaching to children how to recycle their waste, why and where put their waste. Sooner people are aware and better will improve the recycling process.
To sum up, regulate this process could give desire to people to recycle their domestic waste. However, even with taxes and rules about recycling people should be reward. In addition to the government, school should have a great impact and highlight how important are there actions since the youngest age. As far as I am concerned, I think that if people recycle less they should reduce their waste.
The candidate has generally answered the question well. He has discussed the main idea in the task, using laws to make people recycle, but he has also discussed other options (rewarding people and education). Some of the candidate’s ideas are not clear or need to be developed more, for example when he talks about putting taxes on income. The answer is generally well-organised; it has four paragraphs, and each one has a clear function (introduction/discussion of using laws/discussion of other options/conclusion). There is a good range of linking expressions (‘firstly’, ‘for example’, ‘moreover’, ‘on the other hand’) although there is also some repetition (the idea about rewarding people is mentioned at the end of the second paragraph and again at the beginning of the third paragraph). His use of vocabulary is generally clear, and he tries to use some less common vocabulary, but it isn’t always accurate. For example, ‘respect the good bin’ should be ‘place your rubbish in the right container’, and ‘sensibilisation’ should be ‘raising awareness’ (in both cases the candidate has translated from his own language). In terms of grammar, there are again some good complex sentences (‘instead of punishing people they could give a reward’) but there are also quite a few errors, for example with tenses (‘in recent years the household waste are increasing’ , ‘nobody try’) and participles (‘you should be punishED’, ‘people should be rewardED’.)
This answer would probably achieve 6.5. Its strengths are its organisation and the fact that the writer has addressed the task well and his position is generally clear. However, the errors in grammar and vocabulary mean that it cannot be higher than 6.5.
Some people believe that the amount of recycled household waste is insuficient. Recycling is very important to decreace waste and protect environment. However, people may not increase recycling if they are led to recycle compulsory by laws. In this essay, I will look at the way to rise recycling by laws or others and explain my opinion.
Making laws is might be the best way to encourage people to recycle because not many people try to recycle from their own motive. For example, when they purchase beverage cans made from aluminium, they are able to recycle them to reuse. Although they need to wash, crush and bring them to a collecting place. This process can make people bother. Consequently, they might be not willing to recycle because it is easier to throw them away. When there are laws regarding to recycling, people are forced to recycle, which contributes to increase recycling rate with a high possibility.
On the other hand, there are other ways to compel people to recycle effectively. One of the ways is giving rewards to people who recycle many times. Rewarding such as money and discounts encourage them to rise recycle. If people are able to get discount tickets whenever they bring something to recycle, they may recycle enthusiastically. In addition, education is possible to increase recycling. If people learn the importance of recycling and how to recycle from their childhood, they can do without any special efforts.
In conclusion, introducing legislation maybe let people recycle more effectively, however, rewarding or educate them also can become good methods. In my opinion, I think laws are essential to force people to recycle more, because they do not need motivations which is difficult to maintain.
This candidate has also answered the question well. She has addressed the main idea of the task (making recycling compulsory) but also other solutions (rewarding people and education). However, there is also some irrelevant information, for example in the second paragraph about the process of recycling. This answer is also effectively organised; the writer has also used four paragraphs and each one has a clear function. Again, there is a wide range of linking expressions (‘for example’, ‘although’, ‘consequently’, ‘in addition’, ‘in conclusion’). However, there is some repetition of vocabulary which could be avoided (the words ‘recycle’ and ‘recycling’ are used eight times in the third paragraph). In terms of grammar, there are some good complex structures (‘when there are laws…..people are forced….which contributes to….’) along with a few basic errors (‘making laws is might be’). The candidate’s use of vocabulary is generally clear and understandable, but not always accurate or natural (‘rise recycling’, ‘education is possible to increase recycling’, ‘can make people bother’)
This answer would probably also achieve a 6.5. It could be improved by saying more about why laws on recycling might be a good idea, rather than discussing why people avoid recycling. Better use of referencing words (‘it’, ‘this’, etc.) would help to avoid the repetition that we mentioned previously. Also, if the candidate’s vocabulary were more accurate she would have a better chance of increasing her score.
If you have been reading our series on IELTS tips and strategies, it probably means that you are preparing to take IELTS. So, all the best for your exam! If you would like more help preparing for the IELTS exam, have a look at the links below to find information about our IELTS preparation courses and the rest of our IELTS tips blog posts.
This post was written by Daragh, one of our trainers at The London School of English.
IELTS Preparation Courses at The London School of English
We offer four-week and eight-week IELTS preparation courses. These intensive courses focus on language skills and exam techniques that will help you to get the score you need:
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6 DIFFERENCES BETWEEN TEACHING ADULTS AND YOUNG LEARNERS
Published 16th January 2020
One of the best things about being a TEFL teacher is the fact that you could find yourself in a range of different classrooms. You could be teaching kindergarten in Shanghai, teenagers in Buenos Aires or businessmen in Istanbul. As a TEFL teacher you need to be flexible enough to be able to cope in whatever situation you may find yourself.
So if you are a bit unsure about what it will be like teaching the different age groups, here we give you five differences between teaching adults and young learners.
Adult learners are very independent, while Young Learners aren’t. It is possible (and beneficial) to let adults work things out for themselves, organise themselves and even decide the direction of the lessons. With Young Learners, on the other hand, it is necessary to be in charge of the classroom, giving clear instructions and dealing effectively with learning strategies and classroom management.
In terms of learning, Young Learners need to be given a wide variety of activities which relate to the different senses. Activities in a Young Learner classroom should be short. With adults it is possible to spend more time on learning tasks so it is possible to engage more deeply with the learning materials.
Believe it or not, adults are generally more nervous in the classroom than Young Learners. Young Learners seem to have no fear and are willing to try anything – as long as they perceive it to be fun. Adults may feel anxious because of the fact that they are not the age of the “typical” learner and so they will approach activities with a sense of apprehension if they do not feel comfortable; they will need more positive encouragement.
Having said that, adults are more likely to be more motivated than Young Learners. Adults are generally in the classroom because they choose to or because they need to learn English for work or study, which means their motivation levels are naturally high. Young Learners usually have no choice, which means that they may lose enthusiasm if they are not interested in what is happening in the classroom.
Probably the most obvious difference is that of discipline. Teaching Young Learners is all about being able to deal with discipline calmly and effectively. When teaching adults, disciplines should not be an issue because, well, they’re adults.
Finally, the biggest difference between teaching adults and teaching Young Learners is what the students bring to the classroom. Young Learners bring enthusiasm, curiosity and energy, while adults bring life experience. While Young Learners are still learning about the world around them, adults have already had a lifetime of experiences and have their own ideas and opinions.
Though there may be a number of differences between teaching English as a Foreign Language to adults or to Young Learners, the fundamental practices will remain the same. Encourage communication and authentic language use, utilise your students’ previous knowledge and, above all, maintain a fun atmosphere in the classroom and you will be successful no matter the age of your learners.
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