Absolutely and you do a very good job of it. More people need to have access to articles like these because they get overwhelmed with supposed rising green lines and magic strategies that never miss.
Thank you very much! I agree though. I think options strategies get confusing. And no one wants to spend time learning. They usually gravitate to the get rich quick stuff. Just human nature, I suppose!
Thanks for the comment! Option strategies can be a bit boring to read about. Haha. I hope to make it somewhat easy to digest. Since they can be powerful, as you said!
That's a great question! I'm assuming you're referring to a Call Credit Spread?
It's nice to reduce the cost of the Long Put. And you have a good amount of time for that Long Put to play out. And depending on how far dated the Long is, you can continually sell another Short to reduce basis (doesn't always work out though). If the IV is higher in the near term expiration we capitalize on that with the Short. It also has the potential of a better risk/reward, but (of course) that comes with a lower POP.
Truly, it's all up to what a trader likes more! Both are great choices!
That is a great breakdown of a very useful strategy. Real option strategies can be dry, but they are powerful tools in getting consistent returns.
Absolutely and you do a very good job of it. More people need to have access to articles like these because they get overwhelmed with supposed rising green lines and magic strategies that never miss.
Thank you very much! I agree though. I think options strategies get confusing. And no one wants to spend time learning. They usually gravitate to the get rich quick stuff. Just human nature, I suppose!
Thanks for the comment! Option strategies can be a bit boring to read about. Haha. I hope to make it somewhat easy to digest. Since they can be powerful, as you said!
Why use this over a vertical call spread?
That's a great question! I'm assuming you're referring to a Call Credit Spread?
It's nice to reduce the cost of the Long Put. And you have a good amount of time for that Long Put to play out. And depending on how far dated the Long is, you can continually sell another Short to reduce basis (doesn't always work out though). If the IV is higher in the near term expiration we capitalize on that with the Short. It also has the potential of a better risk/reward, but (of course) that comes with a lower POP.
Truly, it's all up to what a trader likes more! Both are great choices!