Selling a vertical put credit spread is a bullish strategy that attempts to profit from a price increase of the underlying as well as a decrease in volatility. Alternatively, if an option trader believes a stock is overbought, and the implied volatility and premium levels in the options are ...
Although the maximum profit of a long Put is strike price x100, but the cost of buying Put is very high, and the option would expire worthless if the stock price doesn't fall.So we can consider a higher leverage strategy of buying a Put Calendar Spread to profit from a market downturn...
Given this constraint, the appropriate option strategy is to purchase November 120 call options and sell November 115 call options because doing so will result in an initial cash inflow of $5.40 – $2.70 = $2.70. Using put options would result in an initial cash outflow of $2.37 and a ma...
A spread is an options position that involves two or more “legs,” that create different risk-reward outcomes than outright purchases or sales. Learn the strategy and tactics in trading bear call and bear put spreads.
The guys answer options trading strategy and concept questions from the YouTube chat and hunt for new trades in the big market selloff. Mike places a long call diagonal spread in United Airlines for earnings, and they discuss their Netflix earnings trades as well. /jlne.ws/3WopsTk October...
Figure 1: THIS STRATEGY HAS GOT YOU COVERED (PARTIALLY).If you're long a stock, but short a call option against it, you're exposed to the downside risk just as you would be without the short call. If the stock rallies above the strike, your stock will be called away, and your prof...