A Consistently Profitable and Low Risk Option Strategy

A Consistently Profitable and Low Risk Option Strategy

Article by Joelle Chan

Today, I’m going to talk about another options strategy… the CREDIT SPREAD. This is actually a directional strategy, which means you have to be either bullish or bearish about a stock.

Let’s start with an example… Suppose you are a big iPhone fan and are extremely bullish about Apple (AAPL). You looked at the chart and identified strong support at 8.28. You believe that there is no way AAPL is going to fall below 8.28. In that case, you can choose to sell the nearest OTM Put, which is the 5 Put. In order to protect yourself from any unexpected plunge in the stock, you buy an even lower OTM Put, which is the 0 Put.

Call Options Ratio for a Net Credit, Risk Profile, selling options, broken wing butterfly

www.expofutures.com Call Ratio for a Net Credit Risk Profile, broken wing butterfly Expo Futures and Options Trading Tools for selling and writing options. Applies to call and put options. Compare risk and rewards to other short option strategies. Example using Crude Oil, also applies to Gold and Currencies. Ask about corn, wheat, coffee, sugar, soybeans, natural gas, gasoline, heating oil, silver, platinum, copper, and all other liquid commodities. Skew Volatility and arbitrage applies. Not a recommendation to buy or sell. Video for Educational purposes only. Speak to your licensed professional before investing. There is significant risk of loss in trading options and futures.
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