Give this video a LIKE to support my channel! Also check out my entire playlist on Trading Options here! ruclips.net/p/PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU
Jake I’ve been such a huge fan since I saw your videos and this is exactly what option strategy Im trying to learn! Keep it up and please let me know on your next live stream!
thanks Jake for the video...have you ever considered the possibility of talking about the pin risk? it is rare, but you can be assigned to your short leg early before expiration...and face therefore some issue due to lack of funds in your account or maybe a gap down the next day after assignment when you already are in possession of you 100 long shares and you did not have time to get rid of them. I find it very confused in the majority of the broker that state that your max loss is the collateral you are using to create the credit. This is not true in reality due to pin risk. Thanks again!
been watching many of your videos even though I've been trading options since the chinese flue struck. I've done pretty well but it doesn't hurt to listen to other opinions and ideas. Although I did learn from a few other you tube experts I really never trusted any of them. they all seem a little slippery. After watching many of your videos I do believe your a pretty straight shooter. I mostly sell puts on SPY, QQQ, IWM and have branched out to some stocks. Hard to find any decent premium when everything is up so high. Its hard for me to wrap my head around the higher and higher price levels.
Thanks so much utubedaveg! Yep, I am not selling anything here and I don't over promise. I am just trying to get out decent information. Thanks for watching!
Very educational video. However, too much downside potential for me. Recently came across butterfly and broken wing butterfly spreads. Looking forward to learning your opinion on this option strategy.
Hey Farmall! Thanks so much for becoming a channel member. I can see all your old comments now. I did make a video about the iron butterfly and it is in my option playlist! Thanks for the support!
Howuch money is your broker going to require you to have do that trade? I know you have Vangard, Fidelity and Schawab accounts and if they would each require amd different amount could you tell us or is there a place to find that information?
Hey W! I actually never wait until expiration. Once I have captured more than 50% of the value of the contracts I sell to close everything and open a new one with a later expiration.
Good content, I heard about rolling forward options. Since short-term capital gains taxes can take a large amount of profits, is it possible to roll forward options to eventually get long-term capital gains? Maybe, it’s an idea for a video if it’s possible
I am not sure put credit spread is a good strategy, since max downside so much higher than max upside, it's just not making sense mathematically, if one so sure about the bull direction why not just buy call and have a stop loss order?
@ Payne Stark "What is the gain/loss if it stays between the spread (ex: $435)?" Strike price, $438 minus stock/etf closing price, $435 = $3.00 per share loss. $3.00 minus $1.03 premium per share collected = a net loss of $1.97 per share x 200 shares = $394.00 total loss (not including commissions), if the short put expires in the money and the shares closed at $435. The long put expired out of the money and was worthless. This scenario can be prevented by rolling both puts out to a farther expiration, and with a far enough away expiration to earn a net credit, so it doesn't cost you anything to prevent this loss. Instead, you earn more premium. A farther away expiration on a put that you sold, takes advantage of the markets tendency to go up in the long run. Hold the strike prices and just keep rolling farther out in time until the market recovers and the short put expires worthless. Cha-ching. Great for small accounts that don't have the capital to sell a cash secured put, and buy 100 shares if the put expires in the money. Cash secured put needs $43,800 collateral to earn $4.16 per share premium. This Put credit spread needed $1,200 collateral to earn $1.03 per share. Knowledge IS power, only IF you apply that knowledge.
Geezus, I DO NOT completely understand: you sell a PUT at 438, buy a PUT @ 432 - What if SPY hits 437? Wouldn't you now have to buy $43,800×2 of SPY, losing you $200? And what if it never hits 432? How is it that you are only needing to put up $997 in collateral?? 🤔
![Bull Put Spread TUTORIAL [Vertical Spread Options Strategy]](http://i.ytimg.com/vi/fSMCL5U9M-I/mqdefault.jpg)
Give this video a LIKE to support my channel! Also check out my entire playlist on Trading Options here!
ruclips.net/p/PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU
This was the perfect video for me to watch at this point in my options trading career/education thank you
Awesome! Glad you found it James!
Finally. A good video on it.
Can you do one where you touch on how it affects your buying power and margin?
Nice. Been waiting for this one!
Thanks Cory! Cheers!
Jake I’ve been such a huge fan since I saw your videos and this is exactly what option strategy Im trying to learn! Keep it up and please let me know on your next live stream!
Thanks for being a channel member Misael! Livestreams will be a regular event on the channel going forward!
HI JAKE VERY GOOD AND SIMPLE EXPLANATION ON SPREADS THANK YOU
You are very welcome Juan! Cheers!
Great example! SPY has been printing money for these.
Very well explained! Thank you so much!
Your explanation is easy to understand. Do you have any video on technical analysis?
Thanks sam! You can check out my video on swing trading if you like: ruclips.net/video/o6MOQEzXwuM/видео.html
Great info. Thanks Jake!
Great job, uber helpful
Thanks blackice! Cheers!
Still have not asked Schwab for options approval, but these vids are increasing my comfort level. Likely will try the wheel strategy when I do.
The Wheel Strategy is a great choice! Can't go wrong!
Great explanation.
thanks Jake for the video...have you ever considered the possibility of talking about the pin risk? it is rare, but you can be assigned to your short leg early before expiration...and face therefore some issue due to lack of funds in your account or maybe a gap down the next day after assignment when you already are in possession of you 100 long shares and you did not have time to get rid of them. I find it very confused in the majority of the broker that state that your max loss is the collateral you are using to create the credit. This is not true in reality due to pin risk. Thanks again!
Can you show us how to close out that trade?
been watching many of your videos even though I've been trading options since the chinese flue struck. I've done pretty well but it doesn't hurt to listen to other opinions and ideas. Although I did learn from a few other you tube experts I really never trusted any of them. they all seem a little slippery. After watching many of your videos I do believe your a pretty straight shooter. I mostly sell puts on SPY, QQQ, IWM and have branched out to some stocks. Hard to find any decent premium when everything is up so high. Its hard for me to wrap my head around the higher and higher price levels.
Thanks so much utubedaveg! Yep, I am not selling anything here and I don't over promise. I am just trying to get out decent information. Thanks for watching!
Very educational video. However, too much downside potential for me. Recently came across butterfly and broken wing butterfly spreads. Looking forward to learning your opinion on this option strategy.
Hey Farmall! Thanks so much for becoming a channel member. I can see all your old comments now. I did make a video about the iron butterfly and it is in my option playlist! Thanks for the support!
Howuch money is your broker going to require you to have do that trade? I know you have Vangard, Fidelity and Schawab accounts and if they would each require amd different amount could you tell us or is there a place to find that information?
Thank you
Thank you D! Cheers!
have emergency fund in my Saving Account but getting a very low interest rate. Is it safe to invest in any Fixed Income or any other ETFS ?
Nice video
Thanks Kevin!
will you walk us through Schwab's Trade and Probability calculator?
Great! 👍 Do you normally wait until it is expired, 9/10/21?
Hey W! I actually never wait until expiration. Once I have captured more than 50% of the value of the contracts I sell to close everything and open a new one with a later expiration.
@@JakeBroe Thanks Jake!
Good content, I heard about rolling forward options. Since short-term capital gains taxes can take a large amount of profits, is it possible to roll forward options to eventually get long-term capital gains? Maybe, it’s an idea for a video if it’s possible
Uhhh... not sure if you roll that you then can get long term rates. Never heard of that before but I can look in to it!
What if they do not exercise the option itm? In that case you only gained premium and lost nothing? :)
jake how did you close that spread please!!!
i mean before expiration...charles schwab is confusing in closing 2 or more legs
I am not sure put credit spread is a good strategy, since max downside so much higher than max upside, it's just not making sense mathematically, if one so sure about the bull direction why not just buy call and have a stop loss order?
What is the gain/loss if it stays between the spread (ex: $435)?
I was also wondering this and how it would play out
@@toddharry7238 I found out afterwards that my brokerage (TD Ameritrade) shows the break-even price. I wasn't approved for Bull Put Spreads though :/
@
Payne Stark "What is the gain/loss if it stays between the spread (ex: $435)?"
Strike price, $438 minus stock/etf closing price, $435 = $3.00 per share loss. $3.00 minus $1.03 premium per share collected = a net loss of $1.97 per share x 200 shares = $394.00 total loss (not including commissions), if the short put expires in the money and the shares closed at $435. The long put expired out of the money and was worthless.
This scenario can be prevented by rolling both puts out to a farther expiration, and with a far enough away expiration to earn a net credit, so it doesn't cost you anything to prevent this loss. Instead, you earn more premium.
A farther away expiration on a put that you sold, takes advantage of the markets tendency to go up in the long run. Hold the strike prices and just keep rolling farther out in time until the market recovers and the short put expires worthless. Cha-ching.
Great for small accounts that don't have the capital to sell a cash secured put, and buy 100 shares if the put expires in the money.
Cash secured put needs $43,800 collateral to earn $4.16 per share premium.
This Put credit spread needed $1,200 collateral to earn $1.03 per share.
Knowledge IS power, only IF you apply that knowledge.
Pcs on spx that are way otm are a damn cheat code
Honestly most times I've played options, I've lost. It's something I will stay away from. If you can do it consistently, you're better than I.
Geezus, I DO NOT completely understand: you sell a PUT at 438, buy a PUT @ 432 - What if SPY hits 437? Wouldn't you now have to buy $43,800×2 of SPY, losing you $200? And what if it never hits 432? How is it that you are only needing to put up $997 in collateral?? 🤔