Credit Spread | ONLY RISK $50 (Beginners)
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- Опубліковано 9 лют 2025
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𝐋𝐞𝐠𝐚𝐥 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞: I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Before investing, please consult a licensed professional. Any stock purchases I show on video should not be considered “investment recommendations”. I shall not be held liable for any losses you may incur for investing and trading in the stock market in an attempt to mirror what I do. Unless investments are FDIC insured, they may decline in value and/or disappear entirely. Please be careful!
Good information.
As someone new to selling options and doing spreads (I've purchased options before and learned that lesson) the hardest thing for me has been watching the option show negative until close to the expiration.
I just started doing options. This video did help solidify my aim of using credit put spreads. Small account made $40 my first week. Would have made $120 second week but it going negative made me jump out. So only made $80 last week..
How did you manage to get approved to do credit spreads with a small account? What brokerage firm you are using?
I’m with Fidelity doings options but they didn’t approve me for credit spreads ☹️
@@franciscobeltran3560 Robinhood easier . To do credit spread u need lv3 option
Brokerage?
Henry, great video-thanks! You motivated me to create my first BullPut Credit Spread 👍
We need a video on what to do if the stock is trading in between strike prices on day of expiration. When you say close does that mean buy back the short? Because when. I select close on RH the fill likeliness is low and doesn’t get filled.
that is correct, closing the Put Credit Spread position is buying it back. This would close the existing position.
Henry thanks you're the best.
You are missing a huge piece of credit spreads the issue is that most stocks you can’t get filled with spreads unless you are super close to the mark price which most people on spreads want cushion so do a video on which stocks will be filled or ETFs with easy positions
Short vol, picking up nickels in front of steamroller
So you can roll at the day of expiration and won’t be assigned? Or roll 1 day before expiration? Which is better so I don’t get assigned?
Am from indonesia ...love that your video has text that I can now get what you speak conviniently. What trading broker platform is it? Robinhood?
Hi Henry, the 265 275 bull call spread still ok at the moment to buy? thanks
you can’t be a beginner and do this you need level 3 options
This is an issue that is ignored . What can a beginner do to qualify to trade simple put option strategies?
THANK YOU!!!! He always overlooks this.
True but buying puts and buying calls is the most risky thing to do, selling spreads is in the middle, and selling puts or call is the safest especially using the wheel strategy
Just set your risk factor to high and raise your income a little bit and you’ll be able to enable level 3.
@@desmondcasto1414Also, be sure to indicate that you don't plan on withdrawing your money.
So finally, what did you do with TSLA which continue to go down on 04/19 ?
With the current drop in market, will call credit spreads be better? Cuz not sure how long will the drop be. Any suggestions if it is your portfolio, what will you do?
When would it close if it go's against you? How soon do you have to roll/close it? Is it like selling calls/puts and it jumps/dumps say 3 days early and get assigned. Will it get assigned only the expiration week for a say 4 week trade?
you can always take the shares at a loss, receive the premium difference and and receive the profit of the long put. if the stock has dropped significantly, you will even make in the loss case a win with PCS, because it will rebounce.
should i still do put credit spreads if i think stocks are to crash and just do what you did and keep opening down or do you think a call credit spread is a good idea
I'm favoured $130k every 4 weeks! I now have a good house and can afford anything and also support my family
If the market is going down a call credit spread may be better
If you're bullish on a stock or you think the market will move sideways then Put credit spread. Otherwise Call credit spreads on stocks you think will go down.
There’s another school of thought about managing a losing position. Close it if price hits your short option which will be a 50 delta and you will cut your losses in half.
This is to confusing for a brand new beginner, whats a delta do you have to have 100 shares already to sell a put?
Everyone please keep in mind that you can have a hard lose if this trade doesn't go in your favor. If you sell a cash-secured put or covered call you can always regain your lost stock value. This trading strategy entails more risk. But with more risk comes larger rewards as well.
do you need a cash account on robinhood or margin? to do put credit spreads
collateral is required but if you qualify you can trade on margin iirc.
Henry does low risk repeat sell covered calls. That's it.
This is the way
& he sells cash secured puts
What is a credit spread can I get that on wealth simple
Hey Henry what is your discord?
I signed up to learn more about the coaching from Henry. I hope your support team is nice, Henry!
Can you make more life advice videos? I’d like to hear more wisdom about finding balance. I’ve made more money with options lately but it didn’t make me happier like I thought it would
I want to invest roughly $7,000 in stocks since i've heard that even in challenging times, Investors may turn to profit. Any excellent ideas for stocks?
You need a pro or someone good at navigating the market, Someone like Franchesca Pv Colton
My monthly yield with Franchesca is crazy high! I finally quit my 9-5
Crazy seeing Franchesca mentioned here. Just 2months with her, I cleared my debts of over a year
@@AmeliaRago I can't even stop checking my portfolio, with her i've been able to make $75k in the past 3months
@@AmeliaRago I can't even stop checking my portfolio, with her i've been able to make $63k in the past 3months
What happens if you let it expire? At the expiration date, ideally you will be in profit of course (for the premium + gain on selling the put), but what happens with the bought call? it will be in loss, so the broker won't force you to exercise on the put?
if I'm understanding you correctly the call poofs from account
Rule is buy options are equal gambling. Sell options are the right ways 🎉
Henry, I don't think my brokerage will allow me to do this type of trade unless I have enough cash in the account to cover the potential assignment of the short put. Thoughts?
put the amount in your account, lol tf
Don’t you have to have collateral for the spreads?
Yes in the amount of the max loss.
That's the part people always leave out lol not many people have the collateral for 100 shares of stocks that are over $100 (10k)
Ikr. I thought I was trippin..
@@dylanbrown5066wrong. Spreads to not require that much collateral. Why do you think it shows a 300 dollar collateral requirement for the Apple spread he has on video.
Can you please explain getting assigned on a put credit spread
you don’t get assigned you just lose the money
According to google a.i., yes, it's possible to get assigned on put credit spread, also known as a bull put spread.
“Not as safe as just selling a put.” What? A put credit spread is much safer than selling a put.
No selling a put or a call is the safest as you do not lose money.
When you sell a put you are paid to buy 100 shares of stock at a certain price making it cheaper to buy shares.
When selling calls you get paid to see calls at a certain price a good way to add income to stocks you hold that are doing good on price appreciation
Selling spreads is called defined risk meaning you can only lose the max amount that you put into the trade. A 5 dollar spread means you put up 500 dollars minus any credits. For the example in the video you had to put up over 300 dollars and you can win about 140 if the price stayed higher then the strike price. In short you get to keep the credit if the price goes below the strike you pay back the credit and you pay some of the money from your pocket
No
This guy likes trading the wheel strategy, so I imagine he meant cash secured puts
@@Lifezpoisonyeah a lot of people refer to selling puts as cash secured puts.
If assignment happen and I don’t have enough funds 🤔
Assignment between the two prices, how will the margin call look like then?
The lower priced put you sold is your risk management. That is why brokerage will keep the $500 for collateral per contract. If it closes in between the 2, then that is your risk amount. The price falls below the short position putting it ITM but doesn't fall to your sold put, then you will be forced to buy at the put price but the underlying stock didn't drop to the lower strike price so you are just selling the stock at the market price after being put the stock. Your short put @ 150 and long put @ 145. Price ends at 147 and you are assigned @ 150. So you purchased 14,700 worth of stock for 15,000. So sell stock for 14,700 for your $300 (minus any premium received) loss on 1 contract. You can also close the position by buying back the short put before assigned but if do that before the assignment date, you are paying for the time left also.
@@Bamapride1985 impressive explanation man 🙏🏻
Can I do credit spread in Canada where the fees are very high for options?
I’m live in Canada - so I opened a USD account with Interactive Brokers - same fees as US citizens that way.
What bout the wash loss Rule? Why close the option at a loss and reopen another one the same day? Can’t then claim the loss which means more taxes to pay.
loss gets carried over anyways, doesn’t change much
@@-matthew yes it changes much lol. If you keep going in and out of the same option within 30 days you can’t use the loss to offset your gains. Meaning higher taxes. So it’s important.
Robinhood is closing my credit spreads before expiration making me lose on my trades. I can't hold until expiration.. I had a trade that was going to settle at $150 and they closed it early giving me a loss. Not cool on a small account.
What is the website used in this video?
Robinhood
Robinhood
Robinhood has many good positions with low likelihood of getting filled, that’s why doing bull put spreads on RH is not very easy. At least that’s my experience.
What happened to Ashley?
Sold Hawaii Electrical (HE) $10 put expires today. The damned thing went to $8 $9 a few days ago, but it is $10.40 now. Looks like the put will expire. This company is monopoly in Hawaii, but there are lawsuits against it due to last year's fire.
something that doesn't make sense to me is if say you have a delta of 0.35. if that means the win rate will be roughly 65% of the time on a position that has a max profit of $142 and a max loss of $358, if you do the math and say 65 out of 100 times you win and 35 times out of 100 you lose, wouldn't your winnings in this instance be $9,230 and your loss be $12,530? how do you protect against the long term potential losses? is this where being able to accurately predict the market comes into play?
He sells before hitting max loss, when he’s down 5-20%
@@davidsosard4939 Correct. On Credit Spreads I open, I do so with the intent of closing at 50% Premium Collected which is typically a 10% ROI in 15 days. On a stock that is trending Up, that 15 days is usually shortened to about 6. On a stock that's moving flat, it's about 9 days. Theta always wins in the end, it's an unstoppable force. On a stock that's trending down, but above your Strike, you're still winning. I do not sell spreads on dog shit companies and pick far OTM strikes. On the rare occasion of assignment, I just ate the tiny loss and moved on. Rinse repeat.
@@davidsosard4939when do you roll to avoid early assignment? The day of or one day of expiration? I don’t understand when is early assignment? Also why would they assign you before expiration date?
Am I the only one who did not see an example/demo purchase of a contract "under $50?"
Ok Henry now your talking my language!!!
Barnes and Noble $BNED basically the same story and set up as $GME
lets say you do roll your tesla position and it continues to go down.. does that mean you'll keep rolling? wont you just keep losing money or are you hoping the stock will go up and you'll collect that premium?
Thank you for your help, some of your videos says we can do put spread and do not need too much in our account, I have some money in my account, but Fidelity rep. is telling me that I have to have minimum 10k to do spread. What am I missing?
irs will say ,this is wash sale
Most people new to options will lose if you go down this guys path. There are ways to make money trading options but this is by far one of the worst routes to take.
Whats a good strategy then with say $1k?
@@brotatochip3409this guy is just in his feelings. Using Henry strats or vertical spreads I’ve made good money. For example yesterday I made $66 off $11 on spy buy buying a $510 call and selling a $509 and $511 call. Fell asleep and let it expired and woke up to profit. I’ve also made $180 off $30 using the same strategy on Starbucks.
Yes, you can lose and yes you can get more by buying more contracts but it’s all on YOU. Your analysis matters. Henry just gives us the •IDEA• you have to do your own due diligence to make it happen
10 days later its not falling down lol
apple probably isnt as good of an example to use right now. youre going to have people copying those suggestions you just made. apple earnings are gonna be reported after hours may 2nd.their price is gonna drop about $8-$10 on open may 3rd. all those 160 puts you were talking about are are gonna be ITM with a great risk of being early assigned. youre going to bankrupt some of those beginners youre trying to help.... at least thats my opinion and not financial advice
i stopped reading the second you said a stock is gonna drop $8-$10 on may 3rd (today is 4/22/24)
a message to all beginners, if anyone tells you what a stock going to do on the earnings report just dont listen to them
😂 if somebody copies someone else's trade completely who is to blame? You only trade your skill level if a person chooses to make a trade it's their responsibility to dd no one else's. Just my take
well now i know who is selling naked calls on may 3
Apple went up $10+ dollars and is still up $10+ dollars on May 3rd 😂….One of many examples of “never listen to people on the internet.”
he actually would win money. Hed collect the entire premium and let his shares get called away. So itd be a successful trade lol @@ruggiero541
You are difficult to follow. You keep bouncing around. A little more focus and perhaps talk a bit slower.