it's good for very beginners, to learn about different spreads. Explanation is very clear and understandable! I took it as well as few other workshops. But all the examples are of past trades, some are from years ago. I would like to see the actual trades now before they are taken, how one picks the strikes and exp date. As well as get advice on how to pick the stocks and more strategies. But at this point I can't afford it. Besides I am not a beginner, I just need a bet deeper understanding and strategy.
seth: It took me a little time to understand that these videos are intended as an educational vehicle and may require further due diligence by the user to verify the long term benefits that the concepts contained within hope to achieve. It isn't said enough-thank you for all the time and hard work it takes to produce these videos. In the spirit of education, and please in no way take this as a criticism, let me call your attention to the video at timeline 3:21. The overlay graphic spelled the word, "simultaneously", incorrectly. :) Thanks again for the video.
Smart way to make money every week using options! 😄 The explanation is really clear, even if you're not new to trading like me. 📈 Selling ATM put credit spreads is a good move. Thanks for sharing this useful info! 👏
@Melissam3837, thank you for your kind comments. The 10 SMA was an example of the kind of indicator that folks use, but we are not endorsing that particular one for this strategy. That is something that traders should establish for themselves.
Thanks SMB, for these videos. Do you sell CALL option spreads if you are bearish, with the same 5-wide, one strike out options? That would have improved the results.
A credit call spread is useful for a bearish sentiment, and a credit put spread is useful for a bullish sentiment. Iron condor for markets that are expected to hold within a range.
@utdoc, I am not sure that this would work as well based on anecdotal observations over the years. You don't get paid as much for call spreads and so the final profit numbers may not be workable. You'd have to experiment and back test.
In the example, every single trade is held until expiration. Overall returns could be increased by closing early any positions that start to go negative.
When you say to place the trade before the index closes - do you attempt to open the position right before market close? What kind of timeframe? The last 5 minutes?
@Karankatiyar5414--then the short option pays out to the extent the price drops below it, and the long option expires worthless. You can still make money if the payout is below the credit received.
@@sethfreudberg4750 I am somewhat new to this and this is one question I always was curious about. Have you made any videos that covers this? I would like to watch
It's best to use 2-3 indicators (if not using naked charts) to gauge where the market may be going. Try to use one from each category. One that measures vol, one that measures momentum, maybe one other to determine trend.
@Scotthess6985, we weren't recommending the 10 SMA we were simply using that as an example of how to use an indicator to determine bullishness. You need to work with a number of different indicators until you find one that suits your trading style and approach.
Question: Do i need the $10,000 in cash in my account or just my accounts total value being over $10,000 and using Margin to fund the buy and and selling of the Put credit spread ?
Most brokerages will show a price between the bid and ask, reflecting a mid-point for entry. There is also usually a dropdown menu for you to select credit or debit spread. Depends on the brokerage, but most are similar.
Just be sure not to loose more than 4 times in a row or you'll be wiped out. It would take true courage, after loosing 3 in a row, to place that 4th trade and risk a total loss of remaining capital.
I am a little confused by this. I have Think or Swim, but I don't understand if this is suggesting that the 10 day simple moving average is a good indicator or not. I don't fully understand the trade if your indicator is bearish. Anyone know where I can read or watch a more detailed explanation of this strategy.
I was confused early on myself. I've only been trading for less than a year. But pay close attention to basically everything, especially what they are saying. People talk about others and then themselves as being bullish or bearish. I have learned that a regular put spread is bullish. A regular call spread is bearish. On the other hand. A long call is bullish. And a long put spread is bearish. In this video he is explaining that the "person" putting the spread on is being bullish but the spread itself is a put spread which is also bullish. Hope this helps. I'm going to start trying it myself.
In a bullish setting, What you think about buying weekly debit spreads instead of selling credit spreads? 1-2 strikes OTM. if you are wrong, you just lose a little, and if you are right, the reward is much bigger than selling credit spreads. Also, if you wrong you dont have that big risk of getting assigned. Thanks
That's the goal, but if at some point it starts to lose money, you can always close it early and take a small loss for that trade. Overall, you should still have more winning trades than losers, and by cutting losses you will most likely see even better returns over the time period he used in the example.
Making money is not the same as keeping it there is a reason why investments aren't well taught in schools, the examples you gave are well stationed, the market crisis gave me my first millions, people shy away from hard times, I embrace them.. well at least my advisor does lol.
Investors should be cautious about their exposure and be wary of new buys, especially during inflation. Such high yields in this recession is only possible under the supervision of a professional or trusted advisor.
Monitoring my portfolio closely has been incredibly rewarding. In just the past two quarters, I've made an impressive $273k. It's fascinating to see how experienced traders can generate significant returns. This has definitely been a bold and exciting decision for me.
My advisor is Camille Alicia Garcia, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
@Stephen, that is something important for you to establish for yourself, but we may have many videos on indicators used by professional traders on our channel. I"d suggest your viewing many of those videos to begin to form a list of your preferred indicators for a trade such as the one we described in this video.
and completely disregard all greeks? how in todays market? Even with POP being in the 90% market steal beats traders. I perhaps can agree that statistics take over in a situation like this. But statistics might be against us as well. Not sure at all. Want to take your course but it's way too expensive for somebody who is starting out. Thanks anyway for an interesting idea, I would like to do my own study for few months and see if this might work. Very interesting info!
@@sethfreudberg4750 thanks, I am wondering if you ight have a bit more advance workshops rather than start at the beginning learning spreads, greeks and other theory.
@@daveb5623 I tried doing different spreads and it won’t let me. I tried iron butterfly but it comes up error says I do t gave the options in my account or something. All it let’s me do is buy to open puts or calls then sell to close them
Wouldn't different options (different strikes and different expiration dates) make them different securities, therefore not effected by wash sale rules? 9:34
@@ryanwaldkirch3364 no if it’s the same stock it doesn’t matter what strike price. It’s the same security so it will be affected by the wash sell rule.
Love SMB but the Risk of ruin way too high with this one. I get it 1-2% isn’t sexy but it keeps you in the game. If you are a degen and need to trade 10 lots at least spread it out. Some puts spreads, calls spreads, different indicators, different tickers, timeframes ect. You holding 10 lots and it gaps down you just locked up 25+% of you capital, rolling, fighting and praying.
wow this is a very very aggressive trade for a 10k account. IF your wrong, there goes 20% of your account.not a very good risk management trade if you ask me.
Agree. This is a very aggressive approach (not judging yet). You are risking 28% of your portfolio for a 23% gain in a week. And you pitch tent at the money for almost a coin flip on the reliance of the 10 sma. Basically you are converting all your money for four tokens in the casino. It isn’t income it is windfall
@@andrewlee1275I think people can sell 1 credit spread rather than a ten lot if they are into better risk management. The risk is controlled by the seller. There is a chance all of that money is lost, but people can buy to close their credit spread to attempt to avoid that. A casino does have to worry about its bank being broken, but most people are not hitting their parlays. Out of the money put spreads should work out over time with proper risk management, but maybe not. Getting premium up front with out of the money credit spreads should have good probabilities, no?
This is great. I have used this strategy, starting with a few thousand, but got bit in Sept. One put was in the money and the other was out of the money. I got assigned on a Thursday evening and on that Friday the market continued down and I had to execute the second one. I was very surprised to see you the assignment on a Thursday. But it did happen and it cost me. How does one account for that?
You could write a trading bot, sit back and relax. Just need a magic indicator that has a consistent edge in the market, and if you get a good one, which is always correct, you could just sell naked options. Since you are always right, you can double your account every week, lol.
Partially agree. They did have to physically do the work, but if you’re just following one indicator like they say, the work is 90 seconds of effort per week. It’s far more passive, time-wise, than 99% of the passive”passive income” strategies out there.
Guys if you are surprised by this you are very amateurish. You will end up losing money no matter what in the long run. Unless you have a plan if the direction goes against you because it will. Trust me
Oh, you just need a magic indicator that will have a consistent edge in the markets, got it, got it... exactly the advice a newbie need: risk 20% of the account keeping their fingers crossed. Seriously, these options videos are pretty bad compared to other information on this channel. If I know how to trade, I don't need them, because they are very repetetive, and if I'm new to trading, they are just misleading. How to choose and backtest an indicator is the most important part and it is not here, and even if an indicator is 70% correct on the direction, you will still have 5-6 loosers in a row sometimes. Managing this strategy on 20% risk is going to be "fun".
I am just going to do my own study to see if it makes any sense. What I like is that they come up with awesome campaigns, it's not sporadic like jump from one stock to another every week. I know somebody who makes millions on just selling puts on QQQ nothing else. It's good to diversify but campaigns sound really smart. and if lets say pick 10-12 stocks to trade and every ones in a while revisit the list and add or take away according to fundamentals there is a possiblity to make pretty good money.
@Daveb that is of course preferable but you'd have to go deep in the money in most cases to achieve that, which then becomes a much lower probability trade.
These are bogus advertising The option trading is the most complicated is highly complicated one and 95 percent of trader loose money in option trading .Don't believe Allthe and loose the money.
Same reason they need all these elite traders. If they could double their money every year with simple options strategies, they wouldn't be sweating their asses off studying level 2.
SMB Options Trading Workshop (free) tinyurl.com/yckz9td8
it's good for very beginners, to learn about different spreads. Explanation is very clear and understandable! I took it as well as few other workshops. But all the examples are of past trades, some are from years ago. I would like to see the actual trades now before they are taken, how one picks the strikes and exp date. As well as get advice on how to pick the stocks and more strategies. But at this point I can't afford it. Besides I am not a beginner, I just need a bet deeper understanding and strategy.
seth: It took me a little time to understand that these videos are intended as an educational vehicle and may require further due diligence by the user to verify the long term benefits that the concepts contained within hope to achieve. It isn't said enough-thank you for all the time and hard work it takes to produce these videos. In the spirit of education, and please in no way take this as a criticism, let me call your attention to the video at timeline 3:21. The overlay graphic spelled the word, "simultaneously", incorrectly. :) Thanks again for the video.
Smart way to make money every week using options! 😄
The explanation is really clear, even if you're not new to trading like me. 📈
Selling ATM put credit spreads is a good move.
Thanks for sharing this useful info! 👏
@premeditatedprofits thank you for your kind comments, keep watching!
Loved the details in this video like 5 wide for a 10k account and using the 10 MA for TA for the upcoming week
@Melissam3837, thank you for your kind comments. The 10 SMA was an example of the kind of indicator that folks use, but we are not endorsing that particular one for this strategy. That is something that traders should establish for themselves.
I love your videos! I have learned a lot from watching these SMB capital videos@@sethfreudberg4750
Thanks SMB, for these videos. Do you sell CALL option spreads if you are bearish, with the same 5-wide, one strike out options? That would have improved the results.
A credit call spread is useful for a bearish sentiment, and a credit put spread is useful for a bullish sentiment. Iron condor for markets that are expected to hold within a range.
@utdoc, I am not sure that this would work as well based on anecdotal observations over the years. You don't get paid as much for call spreads and so the final profit numbers may not be workable. You'd have to experiment and back test.
@@sethfreudberg4750 thanks Seth. I appreciate all your lessons. Thanks for taking time to make these videos.
For an index that is rigged to go Up against inflation and survivorship bias it's not a great idea.
Thank you! Have been studying since '10 Errors'.
Great!
How would you manage the trade ? Or do you just take it to the expiration date every week?
Goes to expiration each week, hence passive.
In the example, every single trade is held until expiration. Overall returns could be increased by closing early any positions that start to go negative.
I like this gentleman's explanation, which makes me understand the Bull Put Credit Spread
What is the optimal delta from your point of view? I like to choose a delta between -.20 and -.10.
ATM (5 points) options is is quite risky...
Thanks!
When you say to place the trade before the index closes - do you attempt to open the position right before market close? What kind of timeframe? The last 5 minutes?
What if the index closes in between the sell strike price and buy options strike price in this out credit spread setup ?
You gain partial income!
@Karankatiyar5414--then the short option pays out to the extent the price drops below it, and the long option expires worthless. You can still make money if the payout is below the credit received.
@@vac2695 Not totally correct, you can lose or win. Please see my answer to Karaknatiyar
@@sethfreudberg4750 I am somewhat new to this and this is one question I always was curious about. Have you made any videos that covers this? I would like to watch
Cool but missing the very important detail regarding the magic indicator. Is the 10 SMA enough? IDK
It's best to use 2-3 indicators (if not using naked charts) to gauge where the market may be going. Try to use one from each category. One that measures vol, one that measures momentum, maybe one other to determine trend.
@Scotthess6985, we weren't recommending the 10 SMA we were simply using that as an example of how to use an indicator to determine bullishness. You need to work with a number of different indicators until you find one that suits your trading style and approach.
Question: Do i need the $10,000 in cash in my account or just my accounts total value being over $10,000 and using Margin to fund the buy and and selling of the Put credit spread ?
Is SMB gonna get a Futures Department again an y time soon?
HI there. How to your work out the limit price when placing the order?
Most brokerages will show a price between the bid and ask, reflecting a mid-point for entry. There is also usually a dropdown menu for you to select credit or debit spread. Depends on the brokerage, but most are similar.
what did you do once assigned on losing selling puts? just immediately sell shares to open market?
How can one do this every week of the year when the requirement to enter the trade is a bullish sentiment?
Works both ways, if you think an equity is going up, sell puts, if you think it’s going down, sell calls (spreads)
Just be sure not to loose more than 4 times in a row or you'll be wiped out. It would take true courage, after loosing 3 in a row, to place that 4th trade and risk a total loss of remaining capital.
@bti2270 if that is a concern you could lower your lot size and govern the situation that way.
Is there also a guidance regarding the delta level you sell ?
I am a little confused by this. I have Think or Swim, but I don't understand if this is suggesting that the 10 day simple moving average is a good indicator or not. I don't fully understand the trade if your indicator is bearish. Anyone know where I can read or watch a more detailed explanation of this strategy.
I was confused early on myself. I've only been trading for less than a year. But pay close attention to basically everything, especially what they are saying. People talk about others and then themselves as being bullish or bearish. I have learned that a regular put spread is bullish. A regular call spread is bearish. On the other hand. A long call is bullish. And a long put spread is bearish. In this video he is explaining that the "person" putting the spread on is being bullish but the spread itself is a put spread which is also bullish. Hope this helps. I'm going to start trying it myself.
what happens if the trade ends in between our short and long position?
What would be a “Decent accurate indicator”
Seth- Do you have a video tutorial on this strategy if you believe that the Index/Market is going down and you are bearish? Thank you-
In a bullish setting, What you think about buying weekly debit spreads instead of selling credit spreads? 1-2 strikes OTM. if you are wrong, you just lose a little, and if you are right, the reward is much bigger than selling credit spreads. Also, if you wrong you dont have that big risk of getting assigned. Thanks
Do you let the put credit spread expire?
That's the goal, but if at some point it starts to lose money, you can always close it early and take a small loss for that trade. Overall, you should still have more winning trades than losers, and by cutting losses you will most likely see even better returns over the time period he used in the example.
I'm currently not allowed to do this. How do I get an upgraded account on TOS TD ameritrade to sell options ? Should switch broker platforms?
Are you using a margin account? Can't on a cash account.
You need to get your account approved for spreads
You need an “approved” account with $25K.
What happen if it closes between 38.35 and 38.30
@hieubao4679 you can either have a partial win or a partial loss in that case, depending upon the final print.
Thanks alot@@sethfreudberg4750
what will happen if SPX would have closed between the spead ? Will that be a loss ?
Making money is not the same as keeping it there is a reason why investments aren't well taught in schools, the examples you gave are well stationed, the market crisis gave me my first millions, people shy away from hard times, I embrace them.. well at least my advisor does lol.
Investors should be cautious about their exposure and be wary of new buys, especially during inflation. Such high yields in this recession is only possible under the supervision of a professional or trusted advisor.
Monitoring my portfolio closely has been incredibly rewarding. In just the past two quarters, I've made an impressive $273k. It's fascinating to see how experienced traders can generate significant returns. This has definitely been a bold and exciting decision for me.
@@TomD226 Please pardon me, who guides you on the process of it all?
My advisor is Camille Alicia Garcia, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
@@TomD226 She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.
What are some of the acceptable indicators used for this strategy?
@Stephen, that is something important for you to establish for yourself, but we may have many videos on indicators used by professional traders on our channel. I"d suggest your viewing many of those videos to begin to form a list of your preferred indicators for a trade such as the one we described in this video.
Why didn't you calculate the premium for the 3rd trade? The result is better. 2100+2350+2100-2900=?
and completely disregard all greeks? how in todays market? Even with POP being in the 90% market steal beats traders. I perhaps can agree that statistics take over in a situation like this. But statistics might be against us as well. Not sure at all. Want to take your course but it's way too expensive for somebody who is starting out. Thanks anyway for an interesting idea, I would like to do my own study for few months and see if this might work. Very interesting info!
Thanks @eg. Looking forward to seeing you progress as you study more.
@@sethfreudberg4750 thanks, I am wondering if you ight have a bit more advance workshops rather than start at the beginning learning spreads, greeks and other theory.
I almost read that as weekly MASSIVE income
Hopefully it will be massive for you!
😂
Size up and it could be.
To sell a call or put you need the cash to buy the shares in your account? Cuz it won’t let me sell puts or call
Yes on naked puts/calls. Not with a spread.
@@daveb5623 I tried doing different spreads and it won’t let me. I tried iron butterfly but it comes up error says I do t gave the options in my account or something. All it let’s me do is buy to open puts or calls then sell to close them
Your broker will require a certain amount of capital to enter the trade determined by the required margin.
@@sethfreudberg4750 so what can I do a spread with having 2000 cash?
Chart is Daily or Weekly?
Daily.
What about the wash loss sale rule? You can’t claim anything on the losing trades leaving you with a bigger tax bill.
Wouldn't different options (different strikes and different expiration dates) make them different securities, therefore not effected by wash sale rules? 9:34
@@ryanwaldkirch3364 no if it’s the same stock it doesn’t matter what strike price. It’s the same security so it will be affected by the wash sell rule.
Love SMB but the Risk of ruin way too high with this one. I get it 1-2% isn’t sexy but it keeps you in the game. If you are a degen and need to trade 10 lots at least spread it out. Some puts spreads, calls spreads, different indicators, different tickers, timeframes ect. You holding 10 lots and it gaps down you just locked up 25+% of you capital, rolling, fighting and praying.
wow this is a very very aggressive trade for a 10k account. IF your wrong, there goes 20% of your account.not a very good risk management trade if you ask me.
Agree. This is a very aggressive approach (not judging yet). You are risking 28% of your portfolio for a 23% gain in a week. And you pitch tent at the money for almost a coin flip on the reliance of the 10 sma. Basically you are converting all your money for four tokens in the casino. It isn’t income it is windfall
@@andrewlee1275I think people can sell 1 credit spread rather than a ten lot if they are into better risk management. The risk is controlled by the seller. There is a chance all of that money is lost, but people can buy to close their credit spread to attempt to avoid that. A casino does have to worry about its bank being broken, but most people are not hitting their parlays. Out of the money put spreads should work out over time with proper risk management, but maybe not. Getting premium up front with out of the money credit spreads should have good probabilities, no?
Since you get 23% up front wouldn't that nean that if the trade fails you only lose 5%? Because of the 23% credit and 28% collateral?
Max loss is spread width x 100 - credit received. 5000-2200 is 2800
You are right!! A risk management lesson is urgently needed
This is great. I have used this strategy, starting with a few thousand, but got bit in Sept. One put was in the money and the other was out of the money. I got assigned on a Thursday evening and on that Friday the market continued down and I had to execute the second one. I was very surprised to see you the assignment on a Thursday. But it did happen and it cost me. How does one account for that?
Selling options for weekly income isn’t passive unless you hire someone to do it for you. Some work needs to be done.
Clicking buttons is not what i would consider work
You could write a trading bot, sit back and relax. Just need a magic indicator that has a consistent edge in the market, and if you get a good one, which is always correct, you could just sell naked options. Since you are always right, you can double your account every week, lol.
Def needs work and planning, but IMO it's better than going to work for someone else.
Yes. Any time you are swearing the result, it is not passive.
Partially agree. They did have to physically do the work, but if you’re just following one indicator like they say, the work is 90 seconds of effort per week. It’s far more passive, time-wise, than 99% of the passive”passive income” strategies out there.
Guys if you are surprised by this you are very amateurish. You will end up losing money no matter what in the long run. Unless you have a plan if the direction goes against you because it will. Trust me
You trade carefully and only go for obvious moves. Don’t just trade every day
@@whendoigettosayfuck who is trading everyday. The video is once a week and is still very risky
@@aldomale8163 not unless an opportunity is there
Oh, you just need a magic indicator that will have a consistent edge in the markets, got it, got it... exactly the advice a newbie need: risk 20% of the account keeping their fingers crossed. Seriously, these options videos are pretty bad compared to other information on this channel. If I know how to trade, I don't need them, because they are very repetetive, and if I'm new to trading, they are just misleading. How to choose and backtest an indicator is the most important part and it is not here, and even if an indicator is 70% correct on the direction, you will still have 5-6 loosers in a row sometimes. Managing this strategy on 20% risk is going to be "fun".
I am just going to do my own study to see if it makes any sense. What I like is that they come up with awesome campaigns, it's not sporadic like jump from one stock to another every week. I know somebody who makes millions on just selling puts on QQQ nothing else. It's good to diversify but campaigns sound really smart. and if lets say pick 10-12 stocks to trade and every ones in a while revisit the list and add or take away according to fundamentals there is a possiblity to make pretty good money.
Don’t risk 20% unless you are sure: risk 2-5%
Humbled Trader Bro 🤣🤣🤣
Risking 2800 to make 2200, I would prefer something closer to 1:1 on a credit spread
@Daveb that is of course preferable but you'd have to go deep in the money in most cases to achieve that, which then becomes a much lower probability trade.
Had to get new roof and we’ll pump so my $15000 account is under 5k
Best to keep your trading account separate from funds needed for house repairs, etc.
Vokay
Not passive at all..automated ETFs are passive, but most other things are not
These are bogus advertising The option trading is the most complicated is highly complicated one and 95 percent of trader loose money in option trading .Don't believe Allthe and loose the money.
Warren Buffett not even laid to rest. This is making him roll over😂😂😂😂😂😂.
This is much better than Marcus Heittokotter Teachings.
He good at losing Tremendous amount s of Money.
If you only have 10,000 you shouldn't be Trading.....
I don't believe you, why are you selling your program if so successful
Same reason they need all these elite traders. If they could double their money every year with simple options strategies, they wouldn't be sweating their asses off studying level 2.
@Neal we are selling programs that we put our trainees through to trade on our desk.