The only options I've been doing in my small Robinhood account is AMC cash secured puts. I haven't lost one time due to your excellent experience and tips. AMC is the best cheap stock I've found for doing this. I own no AMC stock and never plan to. Thank you, and if you can do a video and include AMC cash secured puts, you'll see what I mean about easy money. Thank you Henry, your the smartest person I've seen on TH-cam.
Great video. Didn’t know low delta means percent-chance of being in the money. I like to go delta of .12 or less. Please do another video of how to choose a stock. I do this by going to fidelity site and scan for hi volatility, then look for lo delta. Fidelity has a chart with an option to show a horizontal price volume line. I choose the longest horizontal price volume. That is support. I choose the lowest price in this bar. I also use 2 bolinger band 20/1 and 20/3. This will form a 3 lane highway. If that highway balloons out, that is hi volatility. If I find a stock where balloon is starting to narrow, that means price is more stable and likely going up. This makes an ideal spread. Anyway, please do a video on choosing a stock for a credit put spread
Great video Henry!! This is the best strategy to grow your account :) I have grown up my account to 83% in 2023 only doing credit spreads. But I dont use such a low delta. I manage my deltas based on the risk reward. I usually go with delta 0.3 when i anticipate a momentum. And lesser delta like 0.20-0.25 for mean reversion trades.
Thank you so so much for doing this! This is wonderful! I wanted to learn about spreads but the language many instructors use is so fancy like no chance I will never be able to do it. But you made it easy to understand for people with no finance degree. Really appreciate you! Send all my good wishes on your way! You will get to all your dreams because you made other people dreams come true!
for closing credit spreads, i find it is best to buy it back to for a dollar each on the day of expiration. if you let it expire, it can become messy with two opposite contracts becoming excerised. do not chase that max profit of one more dollar for 100 hours of headaches
Two things I'd like to point out Just because delta is low doesn't mean it stays low. I've done this sell low delta strategy set it and forget it and once in awhile you get burned and it can be so bad that it wipes out all of your previous gains... You have to manage your deltas either hard stop or mental stop once it breaches a number you're no longer comfortable with... Spy has options that expire everyday now hence 0 DTE craze.
That is so true which many ignore. The one time you loose, it wipes your account. Say you took 10 trades and win 9 times in a row and you loose the 10th time. You won nine times 9 * 70 = $630 and loose the 10th time for a loss of $930. How many can stand that kind of loss and still put the next trade on?
Since I’m one of the first people seeing this. I want to think you for teaching me so many stock option strats and ways to make money. I like that you don’t base your teaching on just large accounts. I’m waiting to get approved for level 3 options in Robinhood and I hope to make more money that I have been. Just want to thank you and let you know your content is helping others.
I would love to see a video on how you manage taxes on your portfolio are there any things you shouldn’t do? How to manage withdrawals knowing you have a tax bill to settle etc…….. great videos thank you so much for your time
1. do you put automatic stop loss on the trade or have you watch the spread credit during the trading hours? if automatic, can i suggest a video on how to achieve it. 2. the max loss vs max profit, referred to as risk reward ratio (RRR), is really lopsided, 93:7. 1 max loss can wipe out 13 max wins (assuming same 1000$ spreads w same RRR profile)? 3. what is the WinLoss ratio of last 30 days?
You math is off, but short answer you wouldnt ever let a max loss happen. Also the example he had of 70$ risking 930$ was not the best one, most spreads are returning 20% not >10% if done correctly.
Good job on explaining the put credit spreads. While I agree utilizing a lower delta for the short strike is nice, expecially on higher IV products; what do you do when the IV is low? Current IV on SPY is 13.76 in the lower percentile of its range. Do you just avoid trading credit spreads until the IV increases or move closer to the money? Thanks
This is something I wanna know too, I just trade them anyway for less premium, but I know some people do debit spreads when IV is low, and credit spreads when IV is high
In a put credit spread you can only lose if the price drops. In a condor you can lose if the price drops or goes up ..(outside the sold contracts). Condors are frustrating for that reason.
Hey Henry, thank you for sharing the video, I always watch your videos on the options trading. Btw, great job on explaining the put credit spreads. Please make a video to Close the position if the spread is ITM at the expiry this would be a great help!
I sure am learning a lot from your videos Henry. Thank you. Towards the end of this video you regularly mention "only a 4% chance" but you are referring to the price moving below 362. I am trying to learn, but it seems to me it should be a "12% chance". I am a novice and happy to be wrong but are you referencing the 352 strike delta by mistake? Thank you.
Right. 12% of the time there will be a loss. The loss will be between 0 and 930. The loss will be closer to the 0 end than the 930 end because the Delta is so low on the lower strike, so I'm guesstimating around a $250 average loss. So out of 100 times (two years doing weekly options) one will win 88 times, making around $6,000 in credits and lose12 times at around -$3,000 for a net $3,000. In order to make more, use technical and fundamental analysis to stack the odds in your favor. Do the trade outside of support or resistance or 50-day moving averages, etc. Or, have a stop-loss rule to always get out when you've lost 10% of your anticipated gain for example. In any case, you could theoretically turn $1,000 into $4,000 in two years.
Excellent, like your straight forward approach, would you trade XSP instead of SPY coz of a small account. Thanks again I enjoy your videos I like the way you approach trading. thank you again
How about a video on the rules that you follow when to get out of a net credit spread? I typically close it out once the strike price of the sold equity is reached. Another rule could be to close out an option contract when your losses are 100% of the premium received.Ok, I watched the entire thing, and there are some means of guidance for the exit process.
I mean, you can close it whenever, it's up to you to manage your risk. I think Henry said he closes the position at a 50% loss, I like to use the strike of the put I sold as a line in the sand where I'm out no matter what if that line is crossed, the worst thing you can do is let it get taken for max loss.
Hi Henry ,Ireally do CNN love your credit spread videos especially this one however you mentioned that you would show the example of closing it but you mostly only spoke but never showed. Could do a bid actually closing 2nd question Is there a way in ROBINHOOD that you set a stop limit order or a stop loss to automate closing? Would really love if you could explain if your price closes in the middle red zone of your sell and bought zone. Thanks again and I eat all your videos. Keep them coming thanks
Would you please add some 1 minute explanation about how to close each one of these options trades you describe? This is one of the few videos you've made explain it.
for the credit spread: you open it as a unit so you close it as a unit. You dont sell a put separately and then buy a put separately (to open the position, the spread) the spread is inseparable. Same when you close the spread you close the whole spread as a unit, dont buy the short put separately and sell the long put separately. Thats what i know, verify it!
i love these videos. Henry! i think these type of "trade with me" videos while you explain the train are your bread and butter. i could watch a thousand of these. the thought process plus seeing you actually trade has definitely helped wrap my head around it all feel way more confident.
Great video. Just wanted to ask if you can give your advice on what to do when the stock falls below the strike price of the put you sold and get an early assignment? If you have a small account and the assignment triggers a margin call, is exercising the put you brought the recommended advice? Lastly, what happens when the stock falls below the strike price of the put you brought and a margin call is triggered? What would you do then? Love to hear your thoughts and advice. Thanks in advance.
Great video, I have also watched the video on Put Credit Spread you did 3 yrs ago. Question: in your SPY example, what if the price falls between $362 and $352, the buyer of the PUT will exercise the option and you will be compelled to buy 100 shares. The protection of the PUT you bought becomes exercisable only if the price drops to $352. Could you develop what would happen then?
What happens if your short put gets assigned is that the brokerage will automatically buy the shares on your behalf and sell them for the strike price, so your loss is the difference between the strike price and the price you had to buy at. The long put that you own limits your maximum loss. Selling put credit spreads on an expensive stock like this is risky because if you don't have enough cash to put up for collateral, you could simply lose the entire spread. If you do have enough money to put up cash for collateral, you could sell the long option and roll your short option out to lower your strike price. At that point it's just a cash secured put, not a credit spread.
Thank you for all you doing. Your vedios are awesome and very educational. It has been most exciting part of my learning experience to option since I am very new to this world of trading. Thank you
Hi Uncle Henry. Is there any potential risk when the stock falls in between the the two strike prices and shares getting assigned early even though there is no enough capital, it doesn't make sense but i am thinking out of the box - not sure what those margin calls are or can the balance go to negative forcing us to buy the shares even though we bought the protection at the lower strike price?
Hey buddy. Great vids. Ty Ty But you’re saying that we calculate the likelihood of success of the put spread using the delta of the long leg vs the short leg. On SPY you were saying the likelihood of trade working out was 96 percent (using the .04 delta of the long leg at the 352 strike) vs the short leg at 362 which had a delta of .12 I would’ve guessed the spread had an 88% likelihood of success What am I missing here?
The reason you get better odds and a higher percentage is simply that the delta is predicting the closing price odds at expiration. In reality what happens you can manage a trade and close it out at very near max profit before expiration day while it is in profit and this will give you a higher percentage of "winning" trades. If you watch Tastylive you'll see a number of videos that show how managing the position and closing before expiration increases the returns and increases the percentage of winning trades. In the last week the amount of profit that has yet to decay is usually so small it's not worth the added risk of holding the short options to expiration.
thanks Patrick, I started using paper money tried SPX on the expiration date the same day. Using sell to close and buy to close option with one contract. the two trades I made were losses. I had no idea of option. Even now I don't. I only buy ETFs and technology stocks. Let me Mimic your trades
Thank you very much for your kindness of sharing your experience and knowledge. I watched your video, each one of them two times! Even I don’t even have RH account Lol, but hopefully one day I will be in your discord group. Cheers!
so that means roughly in premium say share price didnt go under 362 you'd collect say 400-500 dollars in premium and the 70 dollars or so profit on top of that and your collateral/margin would be about 900-1000 dollars which you would get back also so long as option doesnt go ITM? Is this correct? Well this is according to Optionstrat. Can someone please answer? Many thanks.
Your collateral/margin is the difference between the strikes x 100. If you sell a 100 strike put and buy a 90 put it’s $10 x 100 = $1,000 per contract that you have tied up.
In that example, you'd get $68 in premium, which is the max profit, and the collateral requirement is $932. The collateral is released when the trade is closed/expires
Thanks Henry that was a well done video. Straight to the point and easy to understand. I am in a AAL trade. Put credit spread. I heard a Whale bought a big short position on AAL today. Have a good one!
Good shit. QQQ/ SPY can tank 10% in a single day... it does happen... It happened to me :( Lost all my money... 1 month I'm collecting big fat juicy premiums, next I'm struggling trying to figure out how to pay my bills :D
been doing credit spreads on spy and nvidia these last 2 weeks after finally getting approved. up $60 on a $2k portfolio all time thanks in large part to you and financial books! also please do a video on taxes!!!
"I want to get right to the point" Proceed to get of topic. Viewer advice incoming. I understand that you don't like how other TH-camrs teach, instead of pointing out what they do wrong in your opinion, just do what you believe is right. That way you remove negativity from your content and reduce the likelihood of isolating yourself from certain viewers who may follow the teachers you speak of. Good video aside from that. I did learn more about put credit spreads which was the goal. Thank you.❤
Appreciate your wonderful videos, I can repeat watching same video over and over , I am a beginner, I am sure I will be able to make money to retire freely, thank you Henry, God bless you!!
Hello Henry, My name is Amal, i leave in Belgium, i have beenn trading credit spreads for 5 months (my eglish is very bad, sorry!😜), i see your video, it's possible that you do an video on same strategy, but with SPX ( a have 40 000$)...Have a nice Day🤗
If ghe stock rallies and you quickly gain a high profit (approaching 50-75% of max profit) it is much more profitable to close it then and immediately place another trade on that stock where your new trade has a higher potential.
Not sure how your TSLA example (selling the spread for .75) had a max profit of more ( .88 ) ? Is that the ask value of the current market pricing on that credit? (If so you'd never get .88)
Hi Henry. Rod aka Mdnghtshadow. I am very interested in Iron Condors. Please show me more here or in Boot camp. Thanks. I relly enjoy watching and learning from you here on you tube
Great videos Henry. If the trade goes against you on the last day or near the last day do you ever suggest the roll option on the last day to move out of danger on the Put you sold? Thanks, Stan
How do I know I’m about to or loosing money? Because I bought a put credit spread and it immediately show negative balance. Does negative means green or red?
Thank you for your video. The market seems to be bouncing back but a lot of people lost huge sums already. I Will advice traders especially newbies to have orientation of trading before they get involved in it because the Crypto market has been unstable, forget predictions and start making good profit now because future valuations are all guesses. I must say trading offers more benefits than just holding and i have made over 19btc from day trading with Antonia White insights and signals in less than 3 weeks
Close it when you have reasonable profit. No need to hold it to the last day. You're wanting to use that capital again in a new trade and the last days have much lower returns on a percentage basis.
It appears to me that the video must be from a different time frame than the posting date. The trade he references is from a month of October (which hasn't happened yet this year), but the posting was july. Furthermore, I think that the last time SPY was at the price in the video was 3rd quarter of 2022.
Great channel! But 1 misleading statement here is saying you would only lose a lot of money 4% of the time (@18:35). Actually, you will start losing money 12% if the time. You will lose the maximum only 4% of the time. But you NEVER want to lose the maximum. You are risking max loss of $930 to make $70. So this trade starts losing long before that...
I've heard a lot about ^Aaron Marcus^ and his strategies. Also, he's always getting good reviews from people he has traded for... I think I need to give it a try...
I will forever be indebted to ^Aaron Marcus^, this is a trader that helped me when I was in so much debt and now I get to look back at a portfolio of $12,000 weekly
Trusting Mr. Marcus with my investment was the best decision I ever made. I introduced my colleagues at work and at first, they were skeptical so they invested $5000 each now after confirming the payment in less than a day, they made a profit of $12000. Isn't he a true genius?
What I do not understand is when building the credit spread it says min credit but when you go to close it, it says there is a total cost and you have to pay to get out, then the cost to close will be taken out of collateral. Even though the strike price has not been reached.
Options still have some value even if the strike hasn’t been reached. For example if you buy a call that’s out of the money at 6 then two weeks later you sell it at 4, you realize a 2 dollar loss. There is still time value associated with the call, although less.
Yeah I just stumbled across this video and it's a little reckless to suggest these trades without explaining the risks of assignment, pin risk, or even explaining why it is you buy the long leg in these spreads. I get that they're hedging risk by picking low delta puts, but jesus christ....to even suggest holding such a large spread into expiration with SPY hovering just near the put strike is extremely risky. If your short falls into the money in after hours trading and gets exercised while your long is still out of the money since you decided to maximize your credit with a wide spread, you'll very quickly find out your max loss is much higher than what your brokerage app will show you.
is there a way to get around the margin? They would let me do covered call's/Put's and that's it. Spreads or anything else no mater what I had to have margin account. I don't mind playing with my money but someone else's with an interest attached is another.
Yep and Henry will just say well there was a 12% change of loss. But dude you have your students to pad you wallet so for you it can just turn into income if, as, and when you win.
This is dated, could you discuss SPY based on today, if you can assume experienced traders, who do options every day, just zoom in on whether with today’s SPY prices, can we still do credit put spreads? I can become a client if that is needed
Henry, can we set a phone call to discuss option spreads (bull put / bear calls) to see if you offer a service to add to my trades. I would welcome a call if you have time. Thx
@henry: i didnt see where you explained how to close this position when we are making a profit and lock that in! Unless i am wrong that part was left out. Please advise
Not sure if he commented, your brokerage should have a close button after you open the position. Once you lick close they usually give the option of buying to close, where you can give the limit price or choose to roll out
Hello Henry, please why does my account go down or decrease whenever I sell to close my buy calls positions? My account was up by $600 but when I sold to close, it went down to $200. I don't understand. I am one of your new students from Australia
The only options I've been doing in my small Robinhood account is AMC cash secured puts. I haven't lost one time due to your excellent experience and tips. AMC is the best cheap stock I've found for doing this. I own no AMC stock and never plan to. Thank you, and if you can do a video and include AMC cash secured puts, you'll see what I mean about easy money. Thank you Henry, your the smartest person I've seen on TH-cam.
If you keep selling put, you're statistically extremely likely to own AMC pretty soon
You are selling naked puts on AMC?
Great video. Didn’t know low delta means percent-chance of being in the money. I like to go delta of .12 or less. Please do another video of how to choose a stock. I do this by going to fidelity site and scan for hi volatility, then look for lo delta. Fidelity has a chart with an option to show a horizontal price volume line. I choose the longest horizontal price volume. That is support. I choose the lowest price in this bar. I also use 2 bolinger band 20/1 and 20/3. This will form a 3 lane highway. If that highway balloons out, that is hi volatility. If I find a stock where balloon is starting to narrow, that means price is more stable and likely going up. This makes an ideal spread. Anyway, please do a video on choosing a stock for a credit put spread
Great video Henry!! This is the best strategy to grow your account :) I have grown up my account to 83% in 2023 only doing credit spreads. But I dont use such a low delta. I manage my deltas based on the risk reward. I usually go with delta 0.3 when i anticipate a momentum. And lesser delta like 0.20-0.25 for mean reversion trades.
What are mean reversion trades vs momentum?
Thank you so so much for doing this! This is wonderful! I wanted to learn about spreads but the language many instructors use is so fancy like no chance I will never be able to do it. But you made it easy to understand for people with no finance degree. Really appreciate you! Send all my good wishes on your way! You will get to all your dreams because you made other people dreams come true!
for closing credit spreads, i find it is best to buy it back to for a dollar each on the day of expiration. if you let it expire, it can become messy with two opposite contracts becoming excerised. do not chase that max profit of one more dollar for 100 hours of headaches
Can you close a contract anytime?
@@benjaminmartin7702 by close he means buy back the one you sold, and then sell the one you bought. "close"
This video just opened my eyes I think. Been watching your videos for a while now. Appreciate all the knowledge you keep feeding us!
Two things I'd like to point out
Just because delta is low doesn't mean it stays low. I've done this sell low delta strategy set it and forget it and once in awhile you get burned and it can be so bad that it wipes out all of your previous gains... You have to manage your deltas either hard stop or mental stop once it breaches a number you're no longer comfortable with...
Spy has options that expire everyday now hence 0 DTE craze.
ive been asking him to do a video on the risks of these strats. alot of people show them as free money
That is so true which many ignore. The one time you loose, it wipes your account. Say you took 10 trades and win 9 times in a row and you loose the 10th time. You won nine times 9 * 70 = $630 and loose the 10th time for a loss of $930. How many can stand that kind of loss and still put the next trade on?
Do you trade deltas below 30?
Thank you. Do you use technical analysis where to sell your spreads, when you sell these spy credit puts, or you just do it mechanically using deltas?
Since I’m one of the first people seeing this. I want to think you for teaching me so many stock option strats and ways to make money. I like that you don’t base your teaching on just large accounts. I’m waiting to get approved for level 3 options in Robinhood and I hope to make more money that I have been. Just want to thank you and let you know your content is helping others.
What do you mean "think you"?
@@fum00A thank. I miss spelled
I would love to see a video on how you manage taxes on your portfolio are there any things you shouldn’t do? How to manage withdrawals knowing you have a tax bill to settle etc…….. great videos thank you so much for your time
1. do you put automatic stop loss on the trade or have you watch the spread credit during the trading hours? if automatic, can i suggest a video on how to achieve it.
2. the max loss vs max profit, referred to as risk reward ratio (RRR), is really lopsided, 93:7. 1 max loss can wipe out 13 max wins (assuming same 1000$ spreads w same RRR profile)?
3. what is the WinLoss ratio of last 30 days?
You math is off, but short answer you wouldnt ever let a max loss happen. Also the example he had of 70$ risking 930$ was not the best one, most spreads are returning 20% not >10% if done correctly.
Good job on explaining the put credit spreads. While I agree utilizing a lower delta for the short strike is nice, expecially on higher IV products; what do you do when the IV is low? Current IV on SPY is 13.76 in the lower percentile of its range. Do you just avoid trading credit spreads until the IV increases or move closer to the money? Thanks
This is something I wanna know too, I just trade them anyway for less premium, but I know some people do debit spreads when IV is low, and credit spreads when IV is high
@@chimchu3232what does debit spread do?
Henry, love your videos, particularly the latest ones. Very well explained. Do you prefer spreads over iron condors on SPX ? And why ? Thank you
In a put credit spread you can only lose if the price drops. In a condor you can lose if the price drops or goes up ..(outside the sold contracts).
Condors are frustrating for that reason.
Hey Henry, thank you for sharing the video, I always watch your videos on the options trading. Btw, great job on explaining the put credit spreads. Please make a video to Close the position if the spread is ITM at the expiry this would be a great help!
Thank you for this. Why on etrade when i try and set up a "put spread" the buy the put is $5 more than sell the put? They have it backwards?
I sure am learning a lot from your videos Henry. Thank you. Towards the end of this video you regularly mention "only a 4% chance" but you are referring to the price moving below 362. I am trying to learn, but it seems to me it should be a "12% chance". I am a novice and happy to be wrong but are you referencing the 352 strike delta by mistake? Thank you.
Yeah should be the higher number
Right. 12% of the time there will be a loss. The loss will be between 0 and 930. The loss will be closer to the 0 end than the 930 end because the Delta is so low on the lower strike, so I'm guesstimating around a $250 average loss. So out of 100 times (two years doing weekly options) one will win 88 times, making around $6,000 in credits and lose12 times at around -$3,000 for a net $3,000. In order to make more, use technical and fundamental analysis to stack the odds in your favor. Do the trade outside of support or resistance or 50-day moving averages, etc. Or, have a stop-loss rule to always get out when you've lost 10% of your anticipated gain for example. In any case, you could theoretically turn $1,000 into $4,000 in two years.
yup 12% chance
Excellent, like your straight forward approach, would you trade XSP instead of SPY coz of a small account. Thanks again I enjoy your videos I like the way you approach trading. thank you again
I can't do any of these types of things robinhood wont give access to level 3 trading. Any suggestions on how to get level 3.
I made some research about Jennifer fan but no clue on how to reach out to her how did you get to her?
@@johnpsalm6511same here been holding and searching fir a perfect trader I found Jennifer fan but dint know how to reach out
How about a video on the rules that you follow when to get out of a net credit spread? I typically close it out once the strike price of the sold equity is reached. Another rule could be to close out an option contract when your losses are 100% of the premium received.Ok, I watched the entire thing, and there are some means of guidance for the exit process.
He never answered the questions.
I mean, you can close it whenever, it's up to you to manage your risk. I think Henry said he closes the position at a 50% loss, I like to use the strike of the put I sold as a line in the sand where I'm out no matter what if that line is crossed, the worst thing you can do is let it get taken for max loss.
Hi Henry ,Ireally do CNN love your credit spread videos especially this one however you mentioned that you would show the example of closing it but you mostly only spoke but never showed. Could do a bid actually closing 2nd question Is there a way in ROBINHOOD that you set a stop limit order or a stop loss to automate closing? Would really love if you could explain if your price closes in the middle red zone of your sell and bought zone. Thanks again and I eat all your videos. Keep them coming thanks
Would you please add some 1 minute explanation about how to close each one of these options trades you describe?
This is one of the few videos you've made explain it.
for the credit spread: you open it as a unit so you close it as a unit. You dont sell a put separately and then buy a put separately (to open the position, the spread) the spread is inseparable. Same when you close the spread you close the whole spread as a unit, dont buy the short put separately and sell the long put separately. Thats what i know, verify it!
i love these videos. Henry! i think these type of "trade with me" videos while you explain the train are your bread and butter. i could watch a thousand of these. the thought process plus seeing you actually trade has definitely helped wrap my head around it all feel way more confident.
Great video. Just wanted to ask if you can give your advice on what to do when the stock falls below the strike price of the put you sold and get an early assignment? If you have a small account and the assignment triggers a margin call, is exercising the put you brought the recommended advice? Lastly, what happens when the stock falls below the strike price of the put you brought and a margin call is triggered? What would you do then? Love to hear your thoughts and advice. Thanks in advance.
On a 25k account what % of options can you have open. So @ 10% each 25 trades? Or that wont work because money is tied up?
Hey henry. Just started watching your channel and I’m just learning options Home do you close a position?
Great video, I have also watched the video on Put Credit Spread you did 3 yrs ago.
Question: in your SPY example, what if the price falls between $362 and $352, the buyer of the PUT will exercise the option and you will be compelled to buy 100 shares. The protection of the PUT you bought becomes exercisable only if the price drops to $352. Could you develop what would happen then?
What happens if your short put gets assigned is that the brokerage will automatically buy the shares on your behalf and sell them for the strike price, so your loss is the difference between the strike price and the price you had to buy at. The long put that you own limits your maximum loss. Selling put credit spreads on an expensive stock like this is risky because if you don't have enough cash to put up for collateral, you could simply lose the entire spread.
If you do have enough money to put up cash for collateral, you could sell the long option and roll your short option out to lower your strike price. At that point it's just a cash secured put, not a credit spread.
Thank you for all you doing. Your vedios are awesome and very educational. It has been most exciting part of my learning experience to option since I am very new to this world of trading. Thank you
Hi Uncle Henry. Is there any potential risk when the stock falls in between the the two strike prices and shares getting assigned early even though there is no enough capital, it doesn't make sense but i am thinking out of the box - not sure what those margin calls are or can the balance go to negative forcing us to buy the shares even though we bought the protection at the lower strike price?
Hey buddy. Great vids. Ty Ty
But you’re saying that we calculate the likelihood of success of the put spread using the delta of the long leg vs the short leg. On SPY you were saying the likelihood of trade working out was 96 percent (using the .04 delta of the long leg at the 352 strike) vs the short leg at 362 which had a delta of .12
I would’ve guessed the spread had an 88% likelihood of success
What am I missing here?
This is what I thought as well, this trade doesn't seem to have a positive EV from what I understand...
@@jehanwadia I’m thinking maybe he just misspoke or something. lol
You’re right the risk should be based on the short leg’s delta
The reason you get better odds and a higher percentage is simply that the delta is predicting the closing price odds at expiration. In reality what happens you can manage a trade and close it out at very near max profit before expiration day while it is in profit and this will give you a higher percentage of "winning" trades. If you watch Tastylive you'll see a number of videos that show how managing the position and closing before expiration increases the returns and increases the percentage of winning trades. In the last week the amount of profit that has yet to decay is usually so small it's not worth the added risk of holding the short options to expiration.
thanks Patrick, I started using paper money tried SPX on the expiration date the same day. Using sell to close and buy to close option with one contract. the two trades I made were losses. I had no idea of option. Even now I don't. I only buy ETFs and technology stocks. Let me Mimic your trades
Great video Henry. I would love to see a video about selling Iron Condors
Thank you very much for your kindness of sharing your experience and knowledge. I watched your video, each one of them two times! Even I don’t even have RH account Lol, but hopefully one day I will be in your discord group. Cheers!
Put credit spreads are some of my top strategies! love the vids, keep them coming!
so that means roughly in premium say share price didnt go under 362 you'd collect say 400-500 dollars in premium and the 70 dollars or so profit on top of that and your collateral/margin would be about 900-1000 dollars which you would get back also so long as option doesnt go ITM? Is this correct? Well this is according to Optionstrat. Can someone please answer? Many thanks.
Your collateral/margin is the difference between the strikes x 100.
If you sell a 100 strike put and buy a 90 put it’s $10 x 100 = $1,000 per contract that you have tied up.
In that example, you'd get $68 in premium, which is the max profit, and the collateral requirement is $932. The collateral is released when the trade is closed/expires
Henry, when the stock get closer to 362, when I cut losses to close, do I have to do anything to the buy put option, probably not
Thanks Henry that was a well done video. Straight to the point and easy to understand. I am in a AAL trade. Put credit spread. I heard a Whale bought a big short position on AAL today. Have a good one!
Thank you, for the video quick question how far out do you recommend buying the option 1 week , month or even the same day etc
Can we set a , auto close position with Robin Hood or u have to manually close this position
Good shit. QQQ/ SPY can tank 10% in a single day... it does happen... It happened to me :( Lost all my money... 1 month I'm collecting big fat juicy premiums, next I'm struggling trying to figure out how to pay my bills :D
I stumbled onto this channel
I traded options at the CBOE for a market making firm, this is solid
Love the videos and you are a great teacher as well thank you. Iron condors is another strategy and how to manage the position
How do you get options level 3?
Henry , what do you suggest when all your plays are above or at the top of bollinger band and not in the middle?
been doing credit spreads on spy and nvidia these last 2 weeks after finally getting approved. up $60 on a $2k portfolio all time thanks in large part to you and financial books! also please do a video on taxes!!!
"I want to get right to the point"
Proceed to get of topic.
Viewer advice incoming.
I understand that you don't like how other TH-camrs teach, instead of pointing out what they do wrong in your opinion, just do what you believe is right. That way you remove negativity from your content and reduce the likelihood of isolating yourself from certain viewers who may follow the teachers you speak of.
Good video aside from that. I did learn more about put credit spreads which was the goal. Thank you.❤
Loved Video...more Vids on Selling Options with only Level 2 Trading...Thanks
Appreciate your wonderful videos, I can repeat watching same video over and over , I am a beginner, I am sure I will be able to make money to retire freely, thank you Henry, God bless you!!
Can you do a video if you are level 2 trading ? I cant do those spreads yet
Hello Henry, My name is Amal, i leave in Belgium, i have beenn trading credit spreads for 5 months (my eglish is very bad, sorry!😜), i see your video, it's possible that you do an video on same strategy, but with SPX ( a have 40 000$)...Have a nice Day🤗
I really enjoy all your option strategy content and create my own using yours as a reference.
How do I join your discord community?
Love to watch your video all day long, yes ! Right to the point !, I love the lazy way !
Henry Henry! Please discuss more on closing the trade. Thank you.
This video is 1hr old... When did you film this? You are talking about October dates we are in June
@_InvestwithHenry1 spam bot scum
How do you do your technical analysis to place your SPY put credit spreads?
The TA of coin flip
Yes, these are great are great videos (PCS&CCS). Can you also share videos on Iron Condors/Butterfly too.
Cheers 😊
Can you explain why you hold 100% profit credit spreads? Wouldn't you just close them and move on?
If ghe stock rallies and you quickly gain a high profit (approaching 50-75% of max profit) it is much more profitable to close it then and immediately place another trade on that stock where your new trade has a higher potential.
Henry is excellent, I keep watching these inspring videos.
Glad you like them!
@@InvestwithHenry I hear you say you have clients... do you Take on new clients?
This was a much needed video. Loved it once again keep up the fantastic work God bless.
Glad it was helpful!
Not sure how your TSLA example (selling the spread for .75) had a max profit of more ( .88 ) ? Is that the ask value of the current market pricing on that credit? (If so you'd never get .88)
It is June and you are buying Oct. Options?? I am confused. Is this an old video
Can you use a call debit spread as well with similar principles?
3:00 low delta 5:40 cut loss rather than roll
Hi Henry. Rod aka Mdnghtshadow. I am very interested in Iron Condors. Please show me more here or in Boot camp. Thanks. I relly enjoy watching and learning from you here on you tube
Could you demonstrate a calendar or diagonal spread on a low Vol underlying? And explain its normal/best use case. Thanks for all your help. Cheers 🥃
“Set it and forget it” was coined Ronco’s Ron Popeil. Showtime Rotisserie !
Great videos Henry. If the trade goes against you on the last day or near the last day do you ever suggest the roll option on the last day to move out of danger on the Put you sold? Thanks, Stan
Its better to just close the trade when it looks questionable and reopen a brand new trade with good deltas and credit.
For this educational vedio, please make one in Iron candor
Please make a video on how to hedge a portfolio with several long positions, with options?
What are your thoughts on doing this but with spx ? Also what about 6-9 month to exp.
How do I know I’m about to or loosing money? Because I bought a put credit spread and it immediately show negative balance. Does negative means green or red?
Thanks, can you do a video on Debit spreads and if we have to hold until expiration?
Which application are you using to trade options in US?
So how do I close the position " buy to close the put option that I sold at 362 and sell to close the put option I bought. at 352. Is that correct?
Yes but you close it as a spread and not individual single option trades.
No matter how smartly you pick delta 30, 20, even 10- when stock take a dip of 10% during the week it create disaster!
Thank you for your video. The market seems to be bouncing back but a lot of people lost huge sums already. I Will advice traders especially newbies to have orientation of trading before they get involved in it because the Crypto market has been unstable, forget predictions and start making good profit now because future valuations are all guesses. I must say trading offers more benefits than just holding and i have made over 19btc from day trading with Antonia White insights and signals in less than 3 weeks
@Antoniawhite
she's active on TELEGRAMS with the name above..
Worthless spam. MAN you people are annoying as a hemorrhoid.
Awesome video. I love the detailed explanations.
Please Do a video on how to know when to sell call or put spreads ? Do you strongly base on TA?
i would do based on bad news too.
Put ratio spread and Index options.
Is it better to close bull spread at,expiration to avoid after hours exercise???
Close it when you have reasonable profit. No need to hold it to the last day. You're wanting to use that capital again in a new trade and the last days have much lower returns on a percentage basis.
what stocks would you recommend to start just to get
your feet wet and not having to put up the money SPY needs?
What is your shortest term to hold to expiration or close.? Bruce
Nice video! What happens though if get assigned on one leg before expiration .. are you at a loss in that case?
You start losing once it hits your short leg and with the max loss being once it hits your long leg
It appears to me that the video must be from a different time frame than the posting date. The trade he references is from a month of October (which hasn't happened yet this year), but the posting was july. Furthermore, I think that the last time SPY was at the price in the video was 3rd quarter of 2022.
Awesome video man! Sorry im really new. How do you close a position? Doesnt it sell automatically when the date arrives?
Great channel! But 1 misleading statement here is saying you would only lose a lot of money 4% of the time (@18:35). Actually, you will start losing money 12% if the time. You will lose the maximum only 4% of the time. But you NEVER want to lose the maximum. You are risking max loss of $930 to make $70. So this trade starts losing long before that...
THIS
he literally says that the trade has a 12% chance of expiring in the money bro…..
Hey man I missed this video could you do a similar one for next week that could help me start out and practice your techniques
How you close a contract, and can you close at anytime?
Hi there, I'm new to Crypto Currency and I don't know how to go about it. Any suggestions?
I've heard a lot about ^Aaron Marcus^ and his strategies. Also, he's always getting good reviews from people he has traded for... I think I need to give it a try...
I will forever be indebted to ^Aaron Marcus^, this is a trader that helped me when I was in so much debt and now I get to look back at a portfolio of $12,000 weekly
Please how do I get in touch with him??
Trusting Mr. Marcus with my investment was the best decision I ever made. I introduced my colleagues at work and at first, they were skeptical so they invested $5000 each now after confirming the payment in less than a day, they made a profit of $12000. Isn't he a true genius?
Comments scammers
What I do not understand is when building the credit spread it says min credit but when you go to close it, it says there is a total cost and you have to pay to get out, then the cost to close will be taken out of collateral. Even though the strike price has not been reached.
Options still have some value even if the strike hasn’t been reached. For example if you buy a call that’s out of the money at 6 then two weeks later you sell it at 4, you realize a 2 dollar loss. There is still time value associated with the call, although less.
IRON CONDOR video please
Possible to do a video on iron condor early assignment on short call and put. Thanks for the help
I would like to learn about calendar spreads.
With such a wide option range don’t you have a high risk of being assigned the one closer to the money?
Yeah I just stumbled across this video and it's a little reckless to suggest these trades without explaining the risks of assignment, pin risk, or even explaining why it is you buy the long leg in these spreads. I get that they're hedging risk by picking low delta puts, but jesus christ....to even suggest holding such a large spread into expiration with SPY hovering just near the put strike is extremely risky. If your short falls into the money in after hours trading and gets exercised while your long is still out of the money since you decided to maximize your credit with a wide spread, you'll very quickly find out your max loss is much higher than what your brokerage app will show you.
How to close a bull pit spread.
How to close a net credit spread.
is there a way to get around the margin? They would let me do covered call's/Put's and that's it. Spreads or anything else no mater what I had to have margin account. I don't mind playing with my money but someone else's with an interest attached is another.
You need to apply for level 3 options trading with your broker. Look up how to do that in the information area of your brokerage account.
Just tried this yesterday with 2 days to exp and SPY dropped 1.3% the next morning 😭 got hit with the 12% chance of failure on the first try 😂
Yep and Henry will just say well there was a 12% change of loss. But dude you have your students to pad you wallet so for you it can just turn into income if, as, and when you win.
This is dated, could you discuss SPY based on today, if you can assume experienced traders, who do options every day, just zoom in on whether with today’s SPY prices, can we still do credit put spreads? I can become a client if that is needed
Henry, can we set a phone call to discuss option spreads (bull put / bear calls) to see if you offer a service to add to my trades. I would welcome a call if you have time. Thx
Henry, how do we close when its out of the money (meaning we are making profit)? Do we just allow it to expire?
@henry: i didnt see where you explained how to close this position when we are making a profit and lock that in! Unless i am wrong that part was left out. Please advise
Not sure if he commented, your brokerage should have a close button after you open the position. Once you lick close they usually give the option of buying to close, where you can give the limit price or choose to roll out
Hello Henry, please why does my account go down or decrease whenever I sell to close my buy calls positions? My account was up by $600 but when I sold to close, it went down to $200. I don't understand. I am one of your new students from Australia