Compounding Strategy using the Crazy Options Calendar Spread
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- เผยแพร่เมื่อ 20 ม.ค. 2021
- OBTV Episode 14 with Ryan Jones of Pay Day Stocks:
Ryan offers his compounding strategy using the Crazy Calendar. Much to learn in this episode using his disciplined options strategy. - บันเทิง
This is what I was looking for this evening ... thanks a bunch
I so needed this, excellent video. This needs to go viral.
Very interesting trade setup. This didn't even cross my mind but it is quite powerful. Options can really be amazing due to their flexibility. Thanks so much for sharing this video! I have been researching this setup and using different combinations and it looks very interesting. I think that I may try out my finding in the the near future.
This is so great! Oh Lord, I just found a super CRAZY trade strategy that will surely work and with HIGH PROBALILITY. I am blessed also with a valuable life lesson as a trader overall. I hope I can like this video million times. 👏🏼👏🏼👏🏼
What happens to the trade when IV falls significantly before expiration?
Should this trade be placed *only* in low IV environments?
Thanks god let me see this Video, I been doing double calendar spreads DTe around 2 weeks. But recently spx move big, it’s almost reach my BE.
A little more explanation on strike selection and DTE wouldn't have gone amiss.
For a credit you need to go two weeks out. If you go one week out it will be a debit. Nonetheless, the downside protection is a good concept. I just don't think it would take that much for SPY to move into the undesired territory over a period of two weeks.
The compounding example is way off. With an average of $10 per week on a $5000 account you get 0.2% weekly. Compounded weekly you get roughly 11% per year. Your end value is about $8400 after 5 years, nowhere near $40.000.
It takes a little bit of fiddling with the data to get a credit. 2023-12-11 before open I did 16 + 19DTE. SPY close was 460, I set the 3 calls at 467 and the 1er at 461 and 473
Great video. I've been self teaching and boy has it been one expensive ride. This is the first video I saw talking about the 2 dte calendar spreads and I been doing them for months
How is it going with the spreads?
@@alipainting Changed my life! Got me well over the PDT rule.. I do spreads full time now
@@Somanybeats thank you. 😊 I used to be married to a day trader. What a roller coaster 🥴🤪. I'm risk averse so will continue to look into this one particular calendar diagonal debit spread scenario 😅😆. Starting with paper trading, of course! I saw online that there is a course explaining the weekly sells against a monthly buy called the Money Press Method by Preston James. 😊
So you are trading these in such a way that the short options are 2dte, and the long are maybe 4dte?
best indicies would be - ranging with IV between 50 & 60? or . . .
Awesome
I realise the expiries are 05-Feb and 08-Feb, but does anyone know what DTE this was? So, how many days ahead was 05-Feb when the trade was set up?
Looks like he entered the trade on Jan 20th. He mentioned that SPY closed @ 384, and this video was uploaded on the 21st.
I can not for the life of me get my robinhood account to show the graph like this. How many days from Feb 5th is this trade being executed? It says when i just do the 2 option calander to start that i have to do a 1 to 1 ratio.
$10 week will grow to $8k after 5 year !
YOU'RE SAYING MAKING MONEY IN THIS WAY AND STILL ASKING MONEY FROM PEOPLE TO SELL A SERVICE? i DON'T GET IT.
lol who is Ryan Jones? I've been seeing him give presentations under the company names of Triple Play Options, Quantum Charts and Trade Partner. The pricing for his course changes from $797 - $1997 depending on what day of the week he's giving the presentation. Also, when you enter these trades, it's for a debit, not a credit. I've played with it over and over again (low and high vol) and I can't get the risk graph to look remotely like his, while receiving a credit. Happy to discuss further Ryan or OptionsBrew - please change my mind about him and this presentation! I want to believe this works, I really do!
Kevin I 100% agree this is a totally fake strategy. If it is not, then I would love to see the host demonstrate this on SPY just to show us what we are missing.
i think you have to totally ignore the part about the 3 calendars and only focus on the diagonal part of the setup (When i did that, i was finally able to get a credit and similar P/L ratios like in the example). My guess is that the calendars example was left in there on purpose to confuse people enough to buy the course to get a better understanding lol
@@pkwarrior9215 LOL
This is absolutely fake. Bs the profit you could make is at expiration. If it runs before expiration your toast. Also no way to get a credit. You need the calanders your selling to make a profit up till expiration from thier decay. So selling 1 calander to get the credit isnt gonna help. And no way you selling 1 calander and making profit weekly. No way, weekly premiums are not high enough. This is bs.
Can someone please explain how you would defend this trade if it went against you?
Guess roll the option u sell until it finally equals the put you bought thus reaching max loss which should be his 300 or 500 or something
🤘🏻
How do you deal with the constraints of the Day Trading Rule if your account is less than 25,000?
Trade E-mini S&P futures instead of SPY or SPX. Futures have no day trading restrictions.
It's all 1 trade and you are not closing out the trade in the same day
It starts making sense if you swap 25 dollars a week into 25% a week, otherwise it does not make sense if he talks about compound. He also mentions % of the account when he talks about size so there is no way it is 25 USD per week. Also I managed to reproduce the similar graph if I placed the lower wing of the credit spread lower than the current underlying
I could generate a credit like this:
Calendar Spread - 3 - about 3% above current price
Diagonal spread -1 - Sell Call 10% ITM, Buy Call 10% OTM
I'm trying it in Petrobras (I'm Brazilian), current price is 29.95, Break Even would be 32,03
$17 credit, max profit ~$200, max loss infinite but the curve is almost flat after $400 loss (if price reaches $39)
POP is 78%
There's something to it. It's just not as easy as he says. But yeah, I'd love to see him show it live and also explain the role of IV (Petro's IV is high right now, 70-80 percentile)
he is using SPY (DTE shorter, lower IV). Can't use credit spreads in high IV without "More" protection. add a back ratio to the diagonal
Calendar trades always look good when they are set up, but they rarely make money due to the blue line crushing as time goes by
They almost always flatten to be a pancake before expiration.
Why is he selling a course if he can make 360X his investment?
This guy's makes no money trading. Only selling videos and subscriptions
Because people can't listen to basic high value lessons he's giving for free? 360X was a simplistic example of 100 flips of a coin. He never said he gets that return on stocks in any way.
The guy has probably made some money but with all things it's slow and hard even the best need time so why not make side income from what you learn?
if its a $37 credit, how are you closing them for $50? Arent you paying a debit to close early?
Everybody's an expert
He isn't. Fake trades
isnt here someone else who doesnt get the maths he put up? 52 weeks a year at 10$, makes 520. even when compounding the 0,2% return on a weekly basis, we not get close to 40k.
and for the strategy something doesnt add up as well, how can one lot of a diagonal bring more credit than the debit he paid for 3 lot.
What is the DTE on this? Is this a two week trade?
DTE = Day to Expiration
Yes, 16 days for this example
These call calendars/diagnals rarely ever price out to be a net credit at that distance away.
Can it be realistic that $10/wk can grow 5k--> 40k in 5 yr using calendar + Diagonal ? That is 800% return!
Obviously such claims appeals to the greed emotion.
I think smarter approach is what the guest speaker is doing - instead of dealing with market exposure, he is making money collecting Training fee (Risk free).
Very interesting strategy but with the 3 to 1 ratio, I never get a credit, it is only possible with the 1 to 1 ratio
Did you got any further on this? Depending on DTE (how many DTE should this strategy have in the first place?) and width of the diagonal I managed to get a 1:1 and sometimes 1:2 ratio for a credit. Even though my diagonal, to get the 1:2 ratio) was 10pts width instead of 4 pts (SPY at $410 and VIX at $30) which of course also increases the risk significantly compared to the values shown in the video 🤔
You can get a credit with a 3:1 ratio if you widen the strikes of the diagonal. (So instead of 2 points away from the calendar, you can try 3 or more).
There is also no reason to have a diagonal on the credit spread, which makes it harder to get it to generate credit. You can just make the credit spread a straight vertical credit spread and have it expire the same time as the short option in the calendar. This takes a lot of playing with and they do not accurately show in the video what generates that curve. The curve is really only useful to trigger an automatic sell order if the underlying moves too strongly to the upside and is in danger of heading into loss territory.
But for the automatic triggering function of the calendar, you might as well just do a straight credit spread.
I dint see how your creating credit The diagonal would be opened for a debit and and the calendars would be opened for a debit.
Diagonal is opened for a credit... if you're opening the diagonal for a debit you need to switch the strike prices to create the credit.
Net debit strategy like with most calenders
Net credit *with* the added diagonal spread on top of the calendar spread.
This looks like a p and l graph for a $3 wide "credit spread diagonal:
Crazy is a good word for this show I think it was the interruptions that made this show feel like pulling teeth - next time try just let the man speak then ask your questions at the end
Unfortunately, there's nothing all that revelatory in this video. He does make some good points about the importance of small position sizes, playing the probabilities, and understanding how compounding works. But also, when it comes to compounding, he actually misrepresents how it works. As for the strategy itself, he's combining two types of spreads: a simple call calendar spread and a diagonal credit spread. Both are on SPY and he's using the credit spread to finance the calendars, which is fine I suppose but not something I would do.
28:32 Like See ya lol
this is ratio spread
Forget around categorization, just get the concept. There are many variation that outside any categorization in option, there is unlimited trading strategy in option.
There is no credit
Try widening the distance of the diagonal strikes. So instead of 2 points from the calendar, try 3 points or more.
I'm so confused why he wouldn't lose money on the downside. Calendar will lose value if underlying goes down. Only protection he has is with the short call which will expire worthless while the longer term drain more money. Is he showing the whole graph on the downside? I'm pretty sure if everything expires, he'll lose money. Especially if there are 3 calendars!
nope, he collects a premium (assuming there was a premium) so downside is just the premium collection. Not hard to create. You have to sell a credit spread (diag) and make sure the premium pays for the other calendar. Its hard to make much profit overall.
Because its not a true calendar, its more of a Diagonal so collecting a credit is possible
Total scam and total clickbait. You cannot generate a credit with this strategy as he outlines. He is only trying to get you into the paid seminars ($500). Total scam. TH-cam should ban this channel and all content. Downvote and report.
It's not necessary to pay for his seminars, but the strategy works. It's simple. But I do it a little different. I buy 2 calendars instead of 3 for 1 diagonal sold. And the IVR of the back month must be lower than the IVR of the front month.
@@JoseSergioM please provide one actual example with real prices.
@@jdouglas2002: SPY Feb24th - Feb27th 404/407 Diagonal + double 411 Calendar $ 45.00 profit
@@jdouglas2002: SPX Feb24th - Feb27th 3990/4020 Diagonal + double 4050 Calendar $460.00 profit
@@jdouglas2002 I use OptionStrat to simulate the trades. Start with a Call Calendar, then add two more calls (buy one, sell the other) for your Diagonal. All sold options in the front date and all bought options in the back date. Usually it works if you build it one week before front expiration. Try using next fryday as front date and the following monday as back date.
Its all BS
hehe...$100 for 100 coin flips 50/50 gives you $100 at the end NOT $150
No he specifically says that you get double your money if you win. I checked the numbers - they are correct if you assume you win double what you loose.
Does not translate into the real world.
this guy should show his account p/l … i smell bullshit.. you just dont find these kind of trade weekly
100% fake strategy. If it is not, then I would love to see the host demonstrate this on SPY just to show me what I am missing. I would love to be found wrong.
Why did you said that?
Totally agree with you. All he is trying to do is to get suckers to pay $500 for his workshop. Notice how he didn't use an actual option chain, just made up numbers.
It's not fake and you don't understand the options market or you wouldn't have made that comment. What it doesn't take into account is slippage or fees which would eat your credit and then some with 8 contracts per trade if it stays flat or drops. Over time the spy moves up and you can clip a gain look at the monthly chart. Except in Bear markets like 22