You can loose a lot of money with spreads if the stocks goes in the other direction. I stopped with spreads, It's much safer to sell cash secured puts.
Spreads have a user defined loss. Cash secured puts doesn't. Theoritically, you can lose the full value of the stock on a cash secured put. I lost $7,000 on PANW cash secured put because I forgot to close it before earnings and it tanked. If I had a spread instead, I would have lost only a fraction of that.
Please guy, i been warning about that also So i never did a spread, IF I WRONG PLEASE CORRECT ME, I will lose the opportunity, Please everyone says if you win 2 in the 3rd, all the wining are gone and some more! 😮
It’s RUclips 😂 That not true at all in fact selling cash secure puts is the risky version of shorts for credit…. A bull put spread is a conservative strategy that benefits from stability or a rise in the underlying asset’s price, with defined risk and reward.
Once again, Ashley hits it out of the park! No one makes option trading more clear. This is an awesome example of how simple these complicated strategies can be when you have a wonderful teacher. . .
Thank you for narrating the topic smoothly without going into tangents and being consistent throughout the video from start to end. Also, explaining the video thumbnail within the video as you state it, instead of some click-bait image. Very neatly done Keep It Up!!!
I recently discovered you a month or two ago. You are the reason I have started selling covered calls , Ashley. I love your videos. Do you think you could make a video about selling deep itm covered calls. I’m not sure how they work or why someone would choose to sell them other than the value in them. Thanks ❤
If you forgot about this trade and at expiration TSLA was between long and short options. So your long put would be worthless, and your short put would be it's and assigned and would need $28000! So close this before expiry !
I'm extremely cautious when I sell credit spreads which is why I'm successful nearly 100% of the time. I only do it when the setup is favorable, only with a tiny amount of my money and never all into a single trade. My trades this week produced a 20% return on investment which works out to a 2% return on the total I've allocated to sell credit spreads. That's a fairly average week for me.
Hello Ashley, thanks for sharing this information. Can you explain in detail when to use a selling put credit spread? Are you betting that the stock won't go down but will go up? For example, selling the $390 strike and buying the $380 strike. If TSLA goes up to $395, do you still receive the credit? And if TSLA goes down to $380, what happens? Thanks
I did not know about the reduced cash hold requirement when using the spread. Hopefully, it's a global rule, and interactive brokers (IBKR) follow it, too.
How are option spreads treated with respect to the Wash Sale Rule? Most of the time, one leg will show a loss even though there will be a net gain for the spread? Will this trigger the Wash Sale Rule?
Great strategy (very powerful) I think it's the only way to grow a small account, but only after you get a really experienced understanding of the market & how each stock moves to market conditions.
Just wondering if your sell put leg strike price gets breached , would you run the risk of being assigned 100 shares of Tesla ? Also can you actually roll a put credit spread ?
Not usually even if they do the bought put is there as protection and the broker will then exercise both of them and you are responsible for the difference. Which is usually no more higher than the collateral you put up.
@@amirsal2629 if it does get assigned the broker will execute the bought put. However when doing these types of trades you want to close them out 3 to 4 weeks prior to expiration that way you don't have to worry about the broker closing them out in the rare occasion you do get assigned.
No because she is buying a stike below it. So she is only responsible for the gap in between whether it is 500 or 1000 that's what determines how much collateral you need to put up.
It gives those with small accounts a viable option other than swing trading. This trade is already up over 40% in 1 day so it can be closed out for a quick win and prepare for the next trade.
@@ashleytradingwithashley Appreciate the response, your Spirit, and your content. My training steers clear of that R:R. Lowest for me is Risk of 1 to Reward of 3. Hope this helps the community.
You can loose a lot of money with spreads if the stocks goes in the other direction. I stopped with spreads, It's much safer to sell cash secured puts.
No. The loss is defined before you put the trade on. You define the max loss by the width of the spread.
Spreads have a user defined loss. Cash secured puts doesn't. Theoritically, you can lose the full value of the stock on a cash secured put. I lost $7,000 on PANW cash secured put because I forgot to close it before earnings and it tanked. If I had a spread instead, I would have lost only a fraction of that.
Please guy, i been warning about that also
So i never did a spread,
IF I WRONG PLEASE CORRECT ME,
I will lose the opportunity,
Please everyone says if you win 2 in the 3rd, all the wining are gone and some more!
😮
It’s RUclips 😂
That not true at all in fact selling cash secure puts is the risky version of shorts for credit…. A bull put spread is a conservative strategy that benefits from stability or a rise in the underlying asset’s price, with defined risk and reward.
Magnificent presentation Ashley! ✅️
Once again, Ashley hits it out of the park! No one makes option trading more clear. This is an awesome example of how simple these complicated strategies can be when you have a wonderful teacher. . .
Thank you Scott!
Thank you for narrating the topic smoothly without going into tangents and being consistent throughout the video from start to end. Also, explaining the video thumbnail within the video as you state it, instead of some click-bait image. Very neatly done Keep It Up!!!
I appreciate that!
I told myself I'll never do nvda or tsla spreads again. Everytime I got wiped out
Thanks, Ashley!
I recently discovered you a month or two ago. You are the reason I have started selling covered calls , Ashley. I love your videos. Do you think you could make a video about selling deep itm covered calls. I’m not sure how they work or why someone would choose to sell them other than the value in them. Thanks ❤
First put credit spreader, do you ever use Jade Lizards or Zebras?
Jade lizards are nice! Just like broken wing butterflies
If you forgot about this trade and at expiration TSLA was between long and short options. So your long put would be worthless, and your short put would be it's and assigned and would need $28000! So close this before expiry !
Always close before exp, yes :)
I started selling puts on mstx last week. I'm up over 11% ! Just waiting until it comes back down some.
I'm extremely cautious when I sell credit spreads which is why I'm successful nearly 100% of the time. I only do it when the setup is favorable, only with a tiny amount of my money and never all into a single trade. My trades this week produced a 20% return on investment which works out to a 2% return on the total I've allocated to sell credit spreads. That's a fairly average week for me.
Hello Ashley, thanks for sharing this information. Can you explain in detail when to use a selling put credit spread? Are you betting that the stock won't go down but will go up? For example, selling the $390 strike and buying the $380 strike.
If TSLA goes up to $395, do you still receive the credit?
And if TSLA goes down to $380, what happens?
Thanks
I did not know about the reduced cash hold requirement when using the spread. Hopefully, it's a global rule, and interactive brokers (IBKR) follow it, too.
What will happen if Tesla
Falls down in-between your both strikes by expiration?
You close it out likely for a loss.
Very good presentation. New sub.
Thanks and welcome!
This is something I will like to get into, but it sounds and looks so complicated to me.
How are option spreads treated with respect to the Wash Sale Rule? Most of the time, one leg will show a loss even though there will be a net gain for the spread? Will this trigger the Wash Sale Rule?
Each option has a unique identifier so not triggered. :)
What options calculator are you using?
Optionstrat
@ Thank you!!
awesome video
Glad you enjoyed it
Ashley, when you get that robot, please introduce us to her I wanna meet her 😂😂😂🥳🥳🥳
You got it!
Great strategy (very powerful) I think it's the only way to grow a small account, but only after you get a really experienced understanding of the market & how each stock moves to market conditions.
This and swing trading are my favorite ways.
Just wondering if your sell put leg strike price gets breached , would you run the risk of being assigned 100 shares of Tesla ?
Also can you actually roll a put credit spread ?
Not usually even if they do the bought put is there as protection and the broker will then exercise both of them and you are responsible for the difference. Which is usually no more higher than the collateral you put up.
@ so you are suggesting there is totally no assignment of shares involved and it’ll only be settled in my account in terms of cash ?
@@amirsal2629 if it does get assigned the broker will execute the bought put. However when doing these types of trades you want to close them out 3 to 4 weeks prior to expiration that way you don't have to worry about the broker closing them out in the rare occasion you do get assigned.
What will happen if you forget to change the market order to net credit on the initial transaction?
It will not fill :)
The sold put isn’t cash secured ?
No because she is buying a stike below it. So she is only responsible for the gap in between whether it is 500 or 1000 that's what determines how much collateral you need to put up.
Presentation is one thing. The Reward to Risk makes absolutely no real sense.
These are generally "safer" income plays although you can get burnt with these high beta stocks.
It gives those with small accounts a viable option other than swing trading. This trade is already up over 40% in 1 day so it can be closed out for a quick win and prepare for the next trade.
@@ashleytradingwithashley Appreciate the response, your Spirit, and your content. My training steers clear of that R:R. Lowest for me is Risk of 1 to Reward of 3. Hope this helps the community.
@@gladyswj9968 🙏
Nvidia is going to crush tesla.
Quantum computing will destroy NVIDIA. 😂
@@willrose09not soon
@@willrose09 in 15 years
first .
Are you twelve? Lol