Teach Me Like I'm Five: Investing Concepts Made Simple The Hidden Logic of Options | Put-Call Parity Explained With Legos
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May 28, 2025 
Kris Abdelmessih, an options expert and founder of Moontower AI, unravels the intricate world of put-call parity with engaging Lego analogies. He shows how options can replicate stock payoffs, making complex strategies accessible. Kris explains synthetic positions, using creative visuals to illustrate the concept. The discussion includes the mechanics behind covered calls and how professional traders leverage options pricing for insights. It's a playful exploration of options trading that empowers both beginners and seasoned investors.
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Teaching Options to His Son
- Kris Abdelmessih teaches options basics to his sixth grader using a homemade spreadsheet.
- This hands-on family approach illustrates options payoffs and helps simplify complex concepts.
Calls and Puts Are Equivalent Legos
- Calls give the right to buy stock at a fixed strike price, valuable only if stock price exceeds strike at expiration.
- Put-call parity means calls and puts on the same strike relate closely, forming interchangeable building blocks.
Constructing Synthetic Stock
- Combined positions of long call and short put at the same strike replicate owning the stock.
- This synthetic stock shows options can construct payoffs identical to directly holding shares.