SPY Spread Trading - Examples of Credit Spreads Delta
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- Опубліковано 25 вер 2023
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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!
Really appreciate you taking time to teach us ! Thank you
I sell put credit spreads a lot. Finding the best reward for buying power used is the challenge. Diversifying is required for sure! Thanks for sharing your experience!
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly
I understand that tomorrow isn't promised to anyone, but investing today is hard for me now because I have no idea of how and where to invest in. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.
with my big financial decision,it’s important to keep your guard’s up for economic risks. However, smart planning, time management and seeking advise from a financial adviser can help keep you and your money safe
yes i agree and right now the markets are going berserk right now. This is the best time to watch them, get to know them better, and strike when the opportunity presents itself. I learned that from my mentor, *VALERIE ELLEN CIRBO* he's seen dozens of market cycles over the past few decades, and he has a feel for how they move, why they move, and what comes next.
I started stacking to SAVE wealth. I've always been the type of person to spend my entire paycheck. I hate having money just sit in the bank. I am under pressure to grow my reserve of $450k. before I turn 50, I would appreciate any advice on potential investments
With the right strategy, it's not difficult to make monthly profits of up to 6 digits as I've made up to $75k per month since last year. Even though I have been investing for a while, it is very important for me to get help from a tutor to identify and take advantage of this market opportunity
Thank you, Henry!!! 👍
Dear Uncle Henry,
Your passion shines through in your clear and transparent explanations. Your generosity in sharing knowledge is truly appreciated. While the time zone difference and the cost of the full course ($3.5k) made it challenging for me to sign up, I've been diligently watching all your UA-cam videos. I've already learned a tremendous amount and gained much more confidence in trading options. "Thanks" hardly does justice to my gratitude. Please continue your fantastic work!
❤❤
Looking back, this was a winning trade for those wondering. S&P was at $410 on Oct 27th.
Honestly it might have been break even at best. Also, holding it for that month would have been ill advised, while the market was continuing to fall.
Thanks for the great video! How did you determine the strike price of the bought Put? You didnt explain that in the video. Thx!!
Great video! Do you have any other videos where you explain how to adjust the trade if this one goes against you?
What a great video. You mentioned this strategy would be perfect for a small account. What if you had $1M and you wanted to make steady income. What strategy would you use? Thank you!
Sorry another beginner question... if the stock price has this trade profiting, can you just let the contract expires and realize the profits? Or do you have to close the trade before expiration to take the profit? Thank you!
Very helpful video ❤👍
Happy Birthday
Love this video! 👍🏻 Question: How does the wash rule apply to options and assignments as I’m sure as you average lower there will be times assignments are higher within the 30-day period. Do you move to alternative stocks during that period? Thanks!
Witch application website is this ?
What broker are you using for your options?
he is RH guy..
What platform are you using?
what is the minimum capital required for credit spreads on SPT?
So you can get started with a couple hundred
Can we close the spread options (buy back/ sell) the same day or within a day or two of opening the options?
yes kinda but don't do it more then three times or you will get flag for pattern day trader if you buy n sell the same day but you can sell the next day if you want
Another great video
I've not had good luck with SPY, 2 Thursdays back I had to upper SP of my PCS (438) get assigned at 5 am. SPY continued down to 432 and change that next day Friday and was assigned. Lost 432 dollars. 😮💨
The math in this video is a guaranteed way to lose your entire portfolio. The risk reward ratio is far worse than a casino. 15% of the time you will lose more than you gained the other 85%. It's simply NOT worth it.
No one can take care of you money like you can! 💯
❤
Oct 27 2023, SPY was lowest at $409.21 high at $413.95
Ya this video did not age well. But somehow there’s still an 86% chance of profit? Make it make sense
I don't see your discord channel in the description ??
First link training and appointment only
if your bias is that the index will go up why not just selling puts and eventually rolling them?
Why not just sell the put option at 410 and forget about the buy option at 405? I didn't hear an explanation as to why you *buy* the put option. Is it to create a safety net in case the etf goes below 405?
If you do that you'd be selling a Cash-Secured Put and would need the full $40k+ as collateral in order to enter the trade. If you don't have that amount available in your account that is what is referred to as selling a "naked put".
When you buy the put option, you have effective control over 100 shares, which allows you to sell the Put option without needing to have the full $40k collateral.
In effect, its just as you said, the options counteract each other with the result being a small credit to your account. The only collateral you need is the width of the spread x100. In this instance since the spread is $5 so you would need $500 collateral to enter the position.
Also, because of the opposing Puts, it defines the amount of loss you can take. The max loss would be the spread amount minus the premium you received.
If you just buy the 405, it wouldn't be a spread, just a cash secured put. The thing that is nice about spreads is that it hedges you against the trade going bad
I'm trying to avoid new buys now in order not to get sucked into a bear trap. On the other hand, I’d love to know best possible areas and ways to invest amid downtrend, my goal is to retire comfortably at a ballpark of $1.2M
Good luck! comfortable retirement all comes down to how you want to live your life, if you pinpoint a particular amount to retire with, then it's only right to plan with a well-qualified advisor
I agree, the role of advisors can only be overlooked, but not denied. I remember few summers back, just after my awful divorce, I was in dire need of investing guidance to keep my head above water and thankfully, I came across someone of grit, helped a lot to grow back my reserve notwithstanding inflation, from $350k to nearly 7figure as of today.
massive gains! been caught up with emotional investing lately and cant afford any more mistakes, could you please share more info on your invt-adviser? i'm an absolute newb
For sure My advisor is Camille Anne Hector, she's well qualified,Her strategy is top notch and with her strategy i've been able to achieve great gains from the market the internet is where to find her basic info.
No way this is real I had come across a section were this Mrs Camille Anne Hector was highly talked about at this point I’ll just look her up myself cause it would be crazy if I’m missing out on a great opportunity
Volume is in the 1000s. Is it thousand or million?
All I have been doing lately is call credit spreads. Seem to be working perfectly and the PCS are riskier. Maybe I should adjust. My target exit is anywhere between 50-70% of profit and then I’m out.
Discord link?
@_DCA_Crypto sure spammer scammer, why wouldn’t I do that? LOL
Maybe you can clarify a question of mine. This is a simplification of course but, if we safely collect $45 some 86% of the time and assume we lose 455 the other 14% of the time, then the expected value is $45*86% - $455*14% = -$25. This is seemingly a negative expected value trade. Now, the payout is not strictly binary and delta is not actually a measure of win probability, but can you expand on why this trade is actually long term profitable?
Watch tastytrade. They go over all the percentages and P/L ratios at different deltas, IV percentages, holding to expiration vs managing at 21 DTE.
The short answer is that the you have to manage the position (roll it out, close it early for a profit, etc.).
You are correct. It doesn't have a good expected value. Selling a simple put on a stock normally has a better EV than a credit spread.
To make it work don’t ever take a max loss. If you close the position when it crosses your lower strike the losses are way less.
@adamklandis There are often times when you cannot close the position. Personally, this is one of the reasons why I stopped trading credit spreads.
I'm consistently making 40%-65% plus a month using Henry's strategies. Opening a PCS/CCS for a credit of say $10/Loss $90 and sitting on your thumbs thinking your helpless as your position creeps past a $25 loss is the only way you lose money. If you can't close your position then either your broker sucks or you missed the big part of this video (and many of his other videos) about liquidly.
Can someone break it down for me, how is this a positive EV trade?
>risk $455 : gain $45
>needs to win 10x more than u lose in order to be profitable
>delta says you only win 86% of the time
>means you win 6 time you lose once.
This is a negative EV trade my dudes. Do it over the long run consistently without any rule and you'll lose money.
Why not discuss trade management,adjustments etc......???
Henry.... I was so looking to join you but the person I was given to was a AS.Hol. to me.... He would not talk to me like that to my face!!! He had the nerve to tell me I am not a retired soldier because I don't have 6,000 to give you to learn all this.....I am already profitable day trader, I just want to up my game....BUT I will not be disrespected like that by a kid, a millennial but I realize it's not you BUT it is your People.... Thanks for your time I guess
Sir, everything you need to know is on the internet for free. You just have to look. $6000 sounds absurd.
Thank you for your service
86 % chance to make USD45 = 86 x 46 = 3870 and the chance to lose 14 % USD is equal to USD 6370,I am confused about how it makes profit?
Risking $467 to make $33 is really not all that good of a risk to reward. Lets use the delta % chance to clarify this. You get it right 9 out of 10 times, the one time its wrong, you give back all the gains and more, 30 days out anything can happen too. You gotta have a ton of money to reliably make profits on the SPY with options. 1 contract is worth 50k, spreads work but risk cant be ignored.
$45 max in a month? WTH...
Lmao I made almost $1500 in a week doing spreads on the NASDAQ.
$45 with $455 in collateral that's why he said 10% a month. You could do this x100 and make $4500 on $45k THIS IS NOT FINANCIAL ADVICE just explaining.
Was going to just write it down without putting money on the line for the options... would have gotten 6 percent off of 100 dollar spreads. Or there was also 50 percent off of 100 dollar collateral. That was for a month tho or 6 percent for spy for a week.
This video did not age well. By expiration it would have hit $410-415😅
You are really bad at math lol, what’s the point in making 10% on an 86% chance to win, that’s worse odds than playing roulette at a casino. If you did the credit spread in your example 100x you would make $3,870 but lose $6,370, if you trust the delta win rates (which it’s not anyway but that’s how you always seem to use delta, but the delta changes all the time and month to month so you can’t base a yearly strategy off it)
I never see him execute the trades.
He probably doesn't use what he shows on video. This particular trade did not age well. SPY is down to 425, if you opened it you would be in the red.
Watch his videos, use the pause button. His trades are all there
Market only goes up? And that's why SPY went from 450 to 420 in a month when sell call credit spread would have been more profitable 🤣
Henry you really need to script your videos better and think about what you want to talk about and whether it makes sense rather than rambling on its really painful to listen sometimes!
love your vids very helpful..do you have a discord to follow?