I love put ratio spreads, thank you for producing a video on this. Results will vary based on your entry strategy so keep that in mind when reading my tips. 1. 3/1 and 4/1 ratio is far superior than a 2/1. 2. Best set up in terms of option pricing is when the IV of the shorts is higher by 30% to the long. Short IV/Long IV = >30% 3. Sell deltas between 15%-30% 4. Long delta we be around 50%-85%, net credit should be equal or slightly negative. 5. Trade these on index’s not stocks. Stocks may have 50% moves overnight. For stocks use define risk trades only. 6. Close the trade when you can manage the sort puts at 25%-40% profit. 7. Manage losing trades once the short Delta goes in the money. 8. Try to make 2% per month not 2% per week. Don’t blow up your account from over sizing. 20%-30% per year is epic, you can retire on the returns in a few years. You can’t retire on blowing up your account every year.
This was great! The color coded trades and showing the two parts of the trade separately helped to clarify. 👍 Congrats on the 56,879,242.28% compounded annualized return! 🙃
Hello. Can we make money with long distance strikes ? For example TSLA, if buy Call $2000 Exp. 6 month. I understand that there is little chance that TSLA will be $2000 in 6 months. But, with large multi-day gaps, for example from $800 to $1000. Will there be a profit on Call $2000 ?
This is my Rolling Options Record Keeper. The cheapest way to purchase it is to become an options tier patron for a month. www.Patreon.com/drawbridgefinance
Hello, thank you for providing such helpful content! I'm new to your channel so no doubt you have covered this elsewhere, but precisely what do you mean when you mention high implied volatility? Is it when the VIX reaches a specific level or...? TIA. :-)
Generally speaking high volatility in the market is when the VIX is over 20. I also track 52 week IVR which is the stocks relative IV when compared to it’s own range over the past year. High IV rank is 24 or higher.
Yes their cheap after ratio change but what about getting filled on one of these no cost options.i found a credit for entering an AMZN option and various others? T Y .Tony
It’s less downside risk than owning stock outright because you get a credit to close the bear put spread portion of the trade and get forced to by shares (or roll the short put) at the price of the short put. Ideally the stock moves up not down as this is a bullish position. Don’t use this strategy on a stock that you think will go down. I use this on quality stocks that I would like to own long term.
@@DrawbridgeFinance ah i see what you mean, in that worse case we can sell the other leg and let’s ít assigned for other one so i can own share. That makes sense.
@@aseriesofdoobs if you properly manage you dont blow up your account. I know people who were down2% that year and i know people who lost 40% and some who lost 100%. If you bet the farm your going-to loose . If you manage your trades when they win and loose you limit losses regardless of what the market is doing. You should have a significant amount of capital set aside so you have the funds to manage your trades.
14:30 Can someone tell me if he can make that kind of return why does he need patreon and selling shit on the internet? Never mind--- rhetorical question.
@@DrawbridgeFinance Ok, I will be kind. But please don't promise people crazy returns because it's deceiving. If you truly want to help people, give them the truth. A theoretical bazillion % will never happen. That is the truth.
I love put ratio spreads, thank you for producing a video on this.
Results will vary based on your entry strategy so keep that in mind when reading my tips.
1. 3/1 and 4/1 ratio is far superior than a 2/1.
2. Best set up in terms of option pricing is when the IV of the shorts is higher by 30% to the long. Short IV/Long IV = >30%
3. Sell deltas between 15%-30%
4. Long delta we be around 50%-85%, net credit should be equal or slightly negative.
5. Trade these on index’s not stocks. Stocks may have 50% moves overnight. For stocks use define risk trades only.
6. Close the trade when you can manage the sort puts at 25%-40% profit.
7. Manage losing trades once the short Delta goes in the money.
8. Try to make 2% per month not 2% per week. Don’t blow up your account from over sizing. 20%-30% per year is epic, you can retire on the returns in a few years. You can’t retire on blowing up your account every year.
@@JohnYoga So what deltas are you using for your shorts?
THEBEST options tutorial in internet 🤯
Thanks!!!
Very well done Levi! Your content has really evolved over the past couple of years. 👍👍
Thanks Kevin!
Awesome video, you were born for this. Subscribed right away!
Thanks!
Excellent description and explanations.
Thanks!
Love it. Thanks Levi
Excellent explanation. Great presentation.
Glad you enjoyed it!
This was great! The color coded trades and showing the two parts of the trade separately helped to clarify. 👍 Congrats on the 56,879,242.28% compounded annualized return! 🙃
Thanks for joining the live stream today.
very well explained just saw u today and enjoy ur videos
Thanks for finding my videos! Let’s get rich together.
Great video Levi, thanks!
Thanks!!!
Very cool and well explained. Thx
great explanation
Thanks!!
Great video! I know nothing about trading stocks but you explain things in an easy to understand, fluid way,
Thanks!!
Thanks for this video
You’re very welcome
Awesome, thanks for the video, could we use put ratio for purchase stocks even cheaper that using naked puts?, Best regards.
Yes. Put ratios have lower breakevens than short puts (at the same short strike)
Hello.
Can we make money with long distance strikes ?
For example TSLA, if buy Call $2000 Exp. 6 month.
I understand that there is little chance that TSLA will be $2000 in 6 months. But, with large multi-day gaps, for example from $800 to $1000.
Will there be a profit on Call $2000 ?
I love your strategy as I was using it for DKNG which made me some play money for the month 😃
:)
Good job ! Thank you.
Glad you enjoyed!
Hi Levi,
Great video, congratulations!!!
I'm from Brazil and here, we have no informations like this.
I'm already following you.
Thanks!!
In scenarios where there is no earnings announcement, would you still choose the
Typically Put ratio spreads are entered 30-60 Days to expiration. I trade short durations when I’m coupling them with other trades on the same stock.
How can you tell if IV is high or not? Are you comparing the 118 IV to historical IV?
Use IVR. Implied volatility rank. This compares the current IV to the previous IV of the past 365 days.
Which spreadsheet are you using in this video?
This is my Rolling Options Record Keeper. The cheapest way to purchase it is to become an options tier patron for a month. www.Patreon.com/drawbridgefinance
Hello, thank you for providing such helpful content! I'm new to your channel so no doubt you have covered this elsewhere, but precisely what do you mean when you mention high implied volatility? Is it when the VIX reaches a specific level or...? TIA. :-)
Generally speaking high volatility in the market is when the VIX is over 20. I also track 52 week IVR which is the stocks relative IV when compared to it’s own range over the past year. High IV rank is 24 or higher.
@@DrawbridgeFinance Super helpful; thanks for explaining!
Yes their cheap after ratio change but what about getting filled on one of these no cost options.i found a credit for entering an AMZN option and various others? T Y .Tony
The fills are decent if there is enough volume.
Did you change to call ratio spreads as the year went on? 2022 has been a doozie for this method.
Just wider and further from at the money and it’s been pretty good.
Is there an optimal account size that someone should at least have where this would be safe to start trading
I use the strategy the same way I would buy stock. If I am comfortable Holding 100 shares of stock then I play 1 put ratio spread.
what if some crazy event overnight and the stock gap down massively, you're likely fucked? correct me if i'm wrong.
It’s less downside risk than owning stock outright because you get a credit to close the bear put spread portion of the trade and get forced to by shares (or roll the short put) at the price of the short put. Ideally the stock moves up not down as this is a bullish position. Don’t use this strategy on a stock that you think will go down. I use this on quality stocks that I would like to own long term.
@@DrawbridgeFinance ah i see what you mean, in that worse case we can sell the other leg and let’s ít assigned for other one so i can own share. That makes sense.
this did not age well
How so? Still a great strategy
@@DrawbridgeFinance for 2022 though?
@@aseriesofdoobs still performing well.
@@aseriesofdoobs if you properly manage you dont blow up your account. I know people who were down2% that year and i know people who lost 40% and some who lost 100%. If you bet the farm your going-to loose . If you manage your trades when they win and loose you limit losses regardless of what the market is doing. You should have a significant amount of capital set aside so you have the funds to manage your trades.
14:30 Can someone tell me if he can make that kind of return why does he need patreon and selling shit on the internet? Never mind--- rhetorical question.
Thanks again for watching my videos. Please try to be kind when commenting. Have a great rest of your weekend.
@@DrawbridgeFinance Ok, I will be kind. But please don't promise people crazy returns because it's deceiving. If you truly want to help people, give them the truth. A theoretical bazillion % will never happen. That is the truth.
😕 P r o m o s m!!!
I don’t understand. Thanks for the comment.
how about using this strategy on /ZN, /ZS?
Thanks for the great explanation, Levi!
Thanks!!!