$4,500/mo Spread Trading (Small Account)
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- Опубликовано: 21 май 2024
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𝐋𝐞𝐠𝐚𝐥 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞: I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Before investing, please consult a licensed professional. Any stock purchases I show on video should not be considered “investment recommendations”. I shall not be held liable for any losses you may incur for investing and trading in the stock market in an attempt to mirror what I do. Unless investments are FDIC insured, they may decline in value and/or disappear entirely. Please be careful!
I have a 3 fund portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and TSM overlap too much to make sense holding both? However I’ve been in the red for a month now. I work hard for my money, so investing is making me a nervous sad wreck. I don’t know if I should sell everything, sit and just wait but watching my portfolio dwindle away is such an eye -sore.
There are many other interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell the shares or ETFs you want to acquire.
I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 2years+ and I've netted over 2.8million.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like Marisa Breton Dollard who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look Marisa Breton Dollard up and send her a message. You've truly motivated me. God's blessings on you.
In my taxable account I went into dividend investing route. In my Roth I did the buy and hold route with an S&P 500 etf and total market etf along with some Berkshire B stock and SCHD.
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
I am a dividend investor for the most part but I have bought Tesla stock a couple of times. However I have bought Tesla stock again and will hold for the long haul this time.
I'd be retiring or working less in 8 years, and considering this financial recession, Im deciding to begin taking up skilled trades. I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, learn around $130K per year but nothing to show for it yet.
How did you find a good finance advisor? How do you know if they are trustworthy and competent.
People downplay planner’s role, until they are burnt by their mistakes. That’s why I’ve been working with expert planners like ERIC PAUL ELMER.
I've been exploring different trading strategies lately, but none seem to provide consistent results. Any suggestions on the most effective approach?
I can relate. Finding a reliable strategy can be challenging.
Have you considered diversifying your trading portfolio across various markets?
I've diversified, but I'm still experiencing losses.
I faced similar issues …. DESIREE RUTH HOFFMAN is the guide you're looking for. Her expertise in financial planning can help navigate through the complexities.
How did DESIREE RUTH HOFFMAN help you?
RUclips, please delete all the financial advice bot account spam. They are ruining financial literacy content.
I literally scroll down his comments and auto report them immediately. Ridiculously ez to spot. 😂
Henry's looking JACKED 😂💪🏻
He’s lost a lot of fat and added a lot of functional muscles 💪
@@mosqutio88it’s those financial freedom gains 💪
I got a question. What happens when the stock price expires above my strike price for my call credit spread and put credit spread?
dang my man Henry hitting those weights, gains all around! lfg
That's right! :)
Just make sure you fully understand how to manage both legs and exit the position
Can you make a video about Early Assignment/exercise of Spreads? I am afraid MM might exercise my spreads early and I am forced to buy/sell for which I don’t have capital or I hold shares to cover it.
So what would you do with a larger portfolio if you're saying to put less into the put selling strat? Say 90k-150kplus?
How would you close out these spreads and when ?
Watching the crypto market's ups and downs shows how quickly things can change. In crypto, strategic, informed trading isn't a choice; it's a must. Remember, caution is as crucial as ambition here. This dedication to continuous learning is inspiring...managed to grow a nest egg of around 1.2Biitcoin to a decent 11.4Biitcoin... I'm especially grateful to Kerrie Farrell, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape..
As a beginner, it's essential for you to have a mentor to keep you accountable..
I've just looked up her full name on my browser and found her webpage without sweat, very much appreciate this...
Investing with an expert is the best strategy for beginners and busy investors, as most failures and losses in investment usually happen when you invest without proper guidance. I'm speaking from experience..
The fact that i got to learn and earn from her program is everything to me think about it, it's a win win for both ways.....
On the grand scheme of things, once you understand the potential of trad!ng, you can bet on it but I think people need the education to fully understand...
AMZN is going much, much higher.
Henry dont forget to add that the person doing this strategy needs to get broker approval for the account to be able to do this type of strategy
Nice I will try one or both of these strategies
Okay, here's my thought. Before I say it, I want you to know I find your videos very educational.
That said, I have a problem with your first example with Amazon. If I was using the 3-month Bollinger band, like you have mentioned in the past that you like to use, Amazon is right in the middle. In fact, there's a chance it can bounce off of the VWAP at 180 and then test that 189. Especially in 6 weeks. Just my pov
Also, when would you close this trade? Do you wait until it reaches your break even?
selling calls, you are limiting that upside potential. Worse case is being filled on expire. All we want when selling calls is the gradual or even sharp down move next candle after we sell. Ride out the decay for the 2 weeks. Selling puts same thing but reverse. We think it's an up trend. Sell puts, collect the premium. It's free money. IF the technicals are right. If I think it's going up. Selling that put might be the thing. I don't like to sell the call unless it's above my average cost per share minimums. even then the higher the better.
Very informative video. Thank you
Noob question, but how do you calculate the 15% ?
So you leave your spreads to expiration?
How is this 4500 monthly for "Small Account" when you need at least 4k as collateral to earn 640 :/
I mean, you keep saying 15% a in 5 weeks..... so, using your words, you need to invest 30K to earn 4.5k Monthly.... Maybe my definition of "small account" is wrong... (btw, its a legit questions, my numbers dont add up)
actually you need about a 300k account because.. you cant put your whole account on the line with credit spreads.. because one lose will wipe you out.. even 300k is low because that is 10% of your account..
@@zzzzz767 not true - although I do Not agree with his theory which is flawed..... however credit Spreads have controlled risk and cannot loose more than the spread distance! Period
It’s RUclips click bait my man.
That’s about it.
One of the 🐐 in this space
Quick question, what if we choose to close the position before DTE? Do you loose money?
This is what I've been trying to understand. Are you holding this until it expires? Are there indicators that trigger an early closing of the position?
It depends if the trade is profitable at the time of closure. Typically you can see a positive out negative value for what your position is currently worth. If it's positive, then you can close for profit regardless of what day it is. You just can't get MAX profit until expiration. You can also close at a loss if the position is currently negative.
But definitely do NOT let it expire if the stock price is in between your two strike prices, unless you have the capital to cover getting assigned on the sold option. Because then you will get exercised, but the bought option will be worthless so it's not a suitable method to cover it anymore...
when I sell puts. i hold until expire. I want it to expire worthless. but I also don't mind the execution. I collect the premium and max profit is it expires worthless. I want it so far out of the money where I am happy to pay that price today. for a hamburger friday. if something is trading at 50 today and I sell that 30 strike put for 60 days left. I am happy today if that fills because I want to own it and Im not paying 50. I want to sell that call strike at 50 or 60 and be happy,
say you find one with 1500 collateral and 250 premium. you take that 250. by the end of thursday it is at 150. you can buy to close at 150. pocket the 100, and free up that 1500 collateral to sell a different week.
@@jimflask1164 I somewhat understand this, but somewhat confused on covered puts. If you're positive, wouldn't you want to sell it rather execute? When it executes, don't you pay the differences? Like nobody's in this to loose... I hate loosing.
How to join in the discord ..?
What size is a SMALL PORTFOLIO in this video?
How do you define a "small account"?. Would probably need around $50k min to make $4,500 a month and that requires close to a 10% return, assuming minimal losses. One week out for a spread trade is unrealistic as the returns would be peanuts
Right! They using “small accounts” as click bait. Time wasted yet again.
With a $10K, you can make $1k to $1.5k per week using credit spreads. Remember that options expire weekly.
Understand the risk. If someone is making $4500 with a "small account," they are taking a lot of risk. Personally, I hate credit spreads. On his Amazon example, his profit potential is $57 on $443 of risk. He went out 5 weeks and placed a 5-contract order, which produces a maximum gain of $285. That is if you hold the position to expiration. The max loss is $2,215, so the reward to risk is more like 13%. Who cares about percentages? Look at the raw numbers and risk/reward. Additionally, this is $285 over 5 weeks so the $4500 per month is BS or you take A LOT of risk.
Thanks…never thought of selling call spread when price peaked! Wonderful video.
NOPE!!! Stupid to Short a stock Call Spread when trading at Yearly All Time Highs - Foolishness!!!
Thank you Henry!
So I sell call and puts and understand the risk to each of those but I seriously don’t understand the risk to put/call credit spreads? It just all seems too good? Someone explain this like I’m a toddler.
Why do u say not to do bigger trades in PCS if you have a bigger portfolio?
Can anyone explain easily regarding the Call Credit Spread Limit Price? Henry had bid 0.57 - ask 0.73, he mentioned he'd be low balling himself if he chose 0.57 and .73 would get a low fill rate? Surely the lower price is better for you.... I am just trying to understand the logic behind the lower value being bad for Henry...?
This is a credit spread, so the higher amount of the leg is the credit. The credit is what he's earning and a higher amount means more credit. If it were a debit spread, then it would cost money to open this spread and you'd want the lower amount.
@@organic-wealth thank you for the awesome explanation
Make a video on double calendar earnings spreads!!!!
Hi Henry, great content as usual. Could you please highlight how much cash collateral is needed to take on any of these strategies?
you have to find the stock to use the strategy. its always 100. so anything under $10 per share will be under $1000. you can do 100 shares of AMC for 300 and sell the put, even while its trading at 4 to 5 each. but you have to want to be filled or be right that it is going up. amc makes no sense and trying to collect premiums on something so volatile is like juggling hot coals.
the collateral is the difference between strike prices which is $5. or $500 ( $5x100) collateral in his examples
What is small?
What if I wanted to start with $100 ? And build slowly to get to this point?
If you only have $100 to trade, don't. Build your money up first.
Youd have to trade a $1 spread. For example sell a $30 put on intel and buy a $29 put. Your $100 covers the spread but you will need $3000 in cash or margin if Intel goes below $30 on expiration to cover buying the shares if they get exercised.
Do you use a margin account? does it also work with a cash account?
He has stated in previous videos that he does use margin at times.
he is using 300k in margin something like that
I look for a 16ish delta on the the high end and prefer 10 or less for most of my spreads. I've accepted a much higher delta and made insane returns but that's years of painful experience and proper risk management.
Can you sell the call credit spread after it has been opened if the trade starts going against you?
Yes, sure you can. You can close the spread at any time prior to expiration.
You would actually be buying to close, which you can do at any time before expiration.
So the risk-reward is 85%, but the risk of the event happening is 18%? That's 3% less than break-even.
If i have 300k. How much should i allocate for credit spread?
How much are you willing to lose?
Don't you have to have a good amount of knowledge to get approved for spreads? I was denied and had to wait a year to apply again. Not sure if it was due to knowledge or lack of funds in account.
🔥🔥🔥
Bollin-jer is the correct pronunciation. How do you get into GS and not know that?
I'm too good for GS and pronouncing doesn't make money :)
Are there any Strategies that do not include selling options? Because sadly in Germany you can only buy calls and puts.
There are option Levels that you will be eligible for. Try to increase the option level you are currently assigned by checking with your broker
@@santhoshk3920 I do not think you understand. In Germany brokers are not allowed to give you the possibility to sell options by law.
When you buy an option, you pay a premium. The seller collects the premium. As stated above, check with your broker to get the proper level to sell.
need to have enough cash to start this. you have over half million to play with.
What if starbucks went to 50 wouldnt you he fine cause of the 70 put?
the spread is sort of insurance. if you are right, you lose that. The premium is the max profit in the best case.
@@jimflask1164 couldn't the stock dropping 20 bucks below the 70 put make up for it?
The ad on this is hilarious 🤣🤣🤣.
Lady can't even look at the camera when reading.
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Karen Manley
The first step to successful investing is figuring out your goals and risk tolerance either on your own or with the help of a financial professional but is very advisable you make use of a professional.
Wow. I'm a bit perplexed seeing her been mentioned here also Didn't know she has been good to so many people too this is wonderful, i'm in my fifth trade with her and it has been super.
Isn't that the same Mrs Karen Manley that my neighbours are talking about, she has to be a perfect expert for people to talk about her so welll'm new at this, please how can I reach her?
I'm new at this, please how can I reach her?
I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much
Spreads are awesome.
As long as you don’t trade them on robinhood, webull, or moomoo. Those motherfuckers will close your trades out at 3:30pm instead of letting it expire because you’re not a billion dollars away from strike.
IBKR is not much different.
if you are correct. they expire worthless.
Same shit happened to me. I was pissed.
I hate these OTM credit spreads.. Risk 500 to mkae 50 One lost and it takes 10 winner just to get back to BE.. Also is just so boring..
What is the fee to join the discord?
Stupid to Short a stock Call Spread when trading at Yearly All Time Highs - Foolishness!!!
$64 return for a potential $450 loss. You need to succeed 8 times for every one fail to get ahead.
You don't need to let it reach max loss. In fact, you shouldn't! If the technicals change, close the spread and lose only a fraction of the $450.
The point is that pennies on the dollar are being made and you will not ever reach $4500 per month without taking enormous risk. Spreads are terrible, imo.
No man. After buying put on Nvidia I stop following your advices. Then now we should bet on Amazon not growing? 😂 it’s one of the magnificent 7. Please. Keep explaining the fundamentals of option trading, but don’t give us those suggestions!
Him saying that he's shorting Amazon cause it's expensive its just crazy to me.
@@thanasballabani1026 think of it. he is being paid to buy low. if he is filled. he is collecting a premium to sell calls for a profit on the back side.
@@thanasballabani1026 I think he's saying it's near 52 week high (resistance) and is trending down.
if u bet on NVDA u will likely losing all
I'm 67yrs old dead man working,got lung cancer and kidney failure stage4,i'm retired with only $1750/month so i got to move to Vietnam soon for economic reason and die over there because I am homeless and have no family here. Can you give your adviser info? so I can ask for help to get extra money investment for my future funeral
My cash advance for a credit card is only 5K for investment and 24%APY
All it takes one goes against you and you lose months worth of profits even at 50%. Its funny how you presenters don't state that.
and you never make the whole (few dollars) amount unless you hold to expiration which is more risky.
You think wallstreet is stupid and let you make money that easy.
With a delta of -0.18, you'll lose 18% of the time. If you did this trade every day, that's losing about once per week. I don't know many accounts that could survive that lol.
@@organic-wealth Actually, that is not correct, and it is not how Delta works. You can have 18 Delta trades and lose 100% of the time. All the Greeks must be analyzed together as they are constantly moving. This is the trouble with just throwing out terms and percentages.