Stagnant markets are always difficult. Difficult to determine when the breakout is happening and difficult to sit on your hands waiting for a new trend to evolve. For many years one of the favorite ways around this type of market is to sell options. The natural time decay makes option selling a great strategy when the market is “stuck”. However many people do not want to take on the risk of naked option selling – enter the credit spread.
Credit spreads allow the trader to take advantage of option selling strategies while creating a limited risk profile that does not leave them heavily exposed if the trade goes poorly. For this reason many would be option sellers gravitate towards strategies like the credit spread. It’s natural odds of success are 66% or better, and they also provide a limited risk.
Here’s what you’ll get:
- Make steady income selling options
- Selecting options to sell
- Low risk selling strategy
- Option spreads
- Put spreads
- Call spreads
- Iron Condors
- Unwinding a spread
- Limited risk/limited reward strategy
In this program TSU co-founder Jeremy Whaley breaks down the credit spread strategy, explaining what it is, how to create it, and how to trade with it. The first class is a general entry into option selling, selecting options to sell, un-selling an option, understanding the difference in naked vs. covered trades etc. Classes 2 & 3 explain option spread trading, how to think about them and how to combine them into even more advanced spreads such as the Iron Condor. And finally class 4 is about pulling it all together and putting together a trading plan that will help you execute this new found strategy.
Credit spreads have become a favorite strategy among students at TradeSmart University and it is for good reason – they are a solid strategy. Take a chance to watch this series and see if credit spreads could be a good strategy for you to employee as well.