Credit Spreads Explained - Passive Income from Trading Options

[@JakeBroe]

Give this video a LIKE to support my channel! Also check out my entire playlist on Trading Options here! kzbin.info/aero/PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU

[@Discovery_and_Change]

10:17 "Bull" Put spread (when you think/hope stock won't go down to strike price) 10:45 sell a put, and buy a put with a lower strike price (same expiration) 11:45 (example with AAPL stock) 12:14 (choosing first strike price) 13:50 Buy to close and sell to close before expiration!

[@Marl-hj8hh]

I gotta say Jake, I’ve watched a lot of different KZbin channels that left me still confused on options strategies. After watching your videos, now I get it. 👍🏼

[@JakeBroe]

Thanks Marl! I don't like how other channels explain them. They always show the exact same profit and loss spread diagrams which helps zero new people visualize what is happening.

[@jdmeighan1142]

@@JakeBroe I love all your videos and especially your options explainers, but another way I’ve seen it explained is in terms of insurance (e.g. buying puts being analogous to buying insurance for your stock) and I also found that helpful. Keep up the good work man, your killing it and helping a lot of people in the process!

[@Julio836]

Same here. This dude is the best at it

[@thisthat1142]

I was just thinking the same thing, felt compelled to comment, read this thread, sending props here! Thanks for the vid! (3 years later 🙂)

[@mrwsilva1]

I absolutely love this. These options spreads had me confused and I REALLY appreciate how you explain these. Thanks Jake, this is exactly what I needed. If you have any more of these option strategies videos, please keep ‘em coming, thanks!

[@JakeBroe]

Yep! Real examples of credit spread trades in my Schwab account are coming soon!

[@MartinFortKnox]

You explain this stuff way better than anyone else I've seen on youtube. Well Done. I've seen quite a few videos and you're the first one that made the light bulb go on... and stay on. Now I need a video that teaches how to manage these trades and properly close once your in them.

[@waynecole2465]

Excellent content. Liked the tip re closing out both positions prior to expiration.

[@kamaujla8341]

that was awesome and simple explanation, totally makes sense now. watched a lot of content online, but couldn't completely make sense as to when and how you use call vs. puts depending on your outlook for the stock price, but you explained it so well. Thanks so much.

[@amitava1973]

Jake, thank you for posting such wonderful videos. You missed one point in the video, what happens when the price stays in between the cases below. 1. short call leg and long call leg in call credit spread 2. short put leg and long put leg in put credit spread.

[@MrStlover99]

Hey Jake. Just letting you know the the universe bought this specific video to me. I watched your other basic videos a while back. I'm now reading a book on options and been on these specific spreads for a few days and never looked it up on KZbin. Guess what, here we are, lolI

[@JakeBroe]

Awesome! Glad the algorithm brought you back to the channel and this was a timely topic for you. Cheers Shawn!

[@myomy2009]

I like your tidbit at the end about buying to close and selling to close. Never thought about that but it's a great assurance trade that will go as at least as one plans...thanks. Great video!

[@rforfa-Moneysense]

This is definitely priceless content. You do explain things super well... Thank you!

[@deadleague3618]

I’ve learned so much from you over the past couple years Jake. Thank you.

[@JakeBroe]

Thanks for sticking with me deadleague! I've got more content on the way for sure!

[@MP-sb9uh]

Hi Jake, because of your videos I have started to trade options. Thank you so much for posting such great informative videos that has helped me and many others take interest in options trading. You are the best!

[@moneymama6827]

Thanks you are a great teacher. You made it very clear and simple for me to understand.

[@Nice-Y]

One thing a lot of people may not be aware is that you can leg in and out of spreads at different point in time to maximize profits, reduce risks, or simply turn them into entirely different spreads such as debit, diagonal, calendar, ratio, condor, butterfly, etc.

[@JakeBroe]

For sure! Lots of flexibility and room to play around. Move videos on this topic coming in the future!

[@billlogue6260]

The put spread is 25%. You’re tying up $400 in collateral and earning $100. That’s 25% in one month.

[@Truecrimecommunity]

But what I would like to know, is win loss % of this option strategy (I realize it’s different for every person) but is there a way to know a market average? I mean $149 to $135 is not a big move in a month, and In order to make money you need to sell a lot of these. So if you ate wrong 1 time , it would take you being right 4 months in a row just to offset that loss. So if you were wrong just 3 times in would take you a full 12 months of winners to offset 3 bad bets. So I'm not sold on this, or I am missing something? I mean it would only take a 5-6% move against the direction you thought it would go based on this example he gave, in order for you to lose your ass. What am I missing?

[@mmsk1717]

I really really appreciate all the work you’ve put into these videos. You rock!

[@Discovery_and_Change]

On a Bull Put spread, what happens if I get assigned the shares but don't have enough money to buy them? Is that when the account will be in the red and why you recommend closing before expiration/assignment? So, with a Bull Put spread, buying the puts won't help if the stock doesn't fall enough for you to put the shares on someone, correct, and, meanwhile, getting assigned all the other shares would cause the devastating debt on the account? Thanks for the video.

[@matthewsherwin8741]

You know, Jake, you are really doing unbelievably well and I’m happy for you. Wow, I‘ll never have your type of annual income. I have a feeling that this might not be the most popular observation I’m going to give you but when there’s big money flowing you might want to consider how to retire as early as possible (assuming that you want to retire early) and you might want to consider having a will. I know you might not have someone who is near and dear to your heart but a will can still tell people what your wishes are in the unlikely event you pass away early. Consult an attorney who can guide you better than I can. Ask someone to be the executor, health care proxy and have a living will. Believe it or not, someday you will want to have at least some of your assets in fixed income or a fund of some sort that is linked to fixed income. It can become too risky to have all your money in equities. Think it over. It’s food for thought. 👍👍👍

[@JakeBroe]

For sure Matthew! A solid plan for sure! If I die, then my sister gets everything. Lucky her!

[@matthewsherwin8741]

After a little more thought, then again, of course, I have to admit your anger and your sarcasm don’t look too good on you. I have no right to offend you and I’m sorry if I did but with enough time you’ll see I actually make sense here. You’ll see! I have this funny little character trait known as life experience which is something to be valued. I’m getting rich the slow and good old fashioned way-just like Buffett

[@NathanielStockwell]

Excellent video! Thanks so much, my friend!

[@wolfgangi]

Hey Jake, great video again. Your explanations are very intuitive and easy to understand. Thank you!

[@JakeBroe]

Thanks for watching Wolfgang Icarus!

[@MsGorteck]

This was good. I do not think I can do spread options in my Roth. Also, my work schedule means M&T are my days off, so I can't do anything on Friday. So basically I only do Covered Calls and Cash Secured Puts. So I just do a Wheel strategy. You have been really helpful, thank you. Perhaps you could have a video/s focusing on option strategies for Roths and Traditional IRAs.

[@eyeconicsuper245]

Thanks Jake for the video. Can you please show us how to roll a put spread(or when to roll a put spread) Thanks

[@JakeBroe]

Sounds good! I'll have more videos on spreads coming soon!

[@Guerza]

Yet another excellent video, Jake! Will definitely enjoy a follow up looking at the probability of one of the legs being exercised and how Schwab would execute.

[@JakeBroe]

I will have more videos going in to greater detail on this topic coming soon! Cheers Guerza!

[@matthewsherwin8741]

Very interesting, Jake. I’m reviewing this video out of curiosity to see what this topic is really all about and this is a real eye opener to a type of trade I never knew much about! Thank you for posting a valuable video!

[@brianliggins1828]

Excellent Video!

[@flyingtiger2212]

jake - you da best on trading advice and your continuing coverage and support of UKR!!!

[@BigBoyOtero]

Jake, what are characteristics of good stocks fir credit spreads? Are S&P ETFs good or are you looking for more volatility? Also do the same characteristics apply from debit spreads? Lots of questions I know. Thanks for sharing the knowledge

[@JakeBroe]

Hey Rafael! I honestly just want to find stocks that are channeling and trading sideways and then sell credit spread (puts and calls) when they reach their lines of support and resistance. I'll be making some videos about these and what I am looking for soon!

[@cleaner1984]

What happens if your short call or put position gets exercised before the last day of expiration (let's say 2 or 3 weeks before) and you didn't have time to Buy to Close because you were waiting for the last day? And you did a Credit Spread with 10 contracts? Are you screwed? How long before expiration date can a short contract be theoretically exercised?

[@yogeshlinganna521]

Much awaited video.. Thanks for sharing Jake..

[@JakeBroe]

You are very welcome Yogesh! Cheers!

[@donvin999]

Great advice on sell everything. I guess options actually expire at 5:30 pm the day they expire and there’s a story about someone who had a major move in a biotech stock where only one leg was exercised.

[@JakeBroe]

The famous story of the Robinhood trader who committed suicide was he was trading spreads on Tesla. One leg got exercised right away after market close, the share price kept moving after hours and then the other didn't, so his account showed -$700,000.

[@michaelbigham3367]

@JakeBroe Can you explain or point to a video on how to prevent this? You hit it at the end but seemed more in passing. Considering the risk, I would value more info on what to do if the price ends up between the sell and buy strike prices. Thank you!

[@edsakayama5075]

Great video as usual. Also love your videos on the war.

[@markplymale]

Finally!

[@JakeBroe]

Haha, plenty more videos on this topic coming soon. There is a lot to unpack with spreads!

[@briankelley617]

Very nice. I learned some things. Question. I'm thinking of trading vertical spreads in my Schwab account, and I have to apply for level 2 with margin. First, the "collateral"you mention is dipping into your approved margin? You're borrowing in essence on that margin for the option trade contract period in the amount of the collateral? Does Schwab forgo the margin borrowing if you have enough account balance value (cash and securities), to cover the collateral? I'd love to not have to use margin and "stiff" them on their daily interest, if you know what I mean. But, I'm guessing doesn't work that way? Thank you!

[@stuyg86]

I'm definitely gonna be watching this video again, and watching your options strategy playlist. The collateral on my cash secured puts has a very high opportunity cost right now.

[@stuyg86]

well darn; level 2 requires margin, and I really prefer my cash account. I would have thought collateralized option chains like these, wouldn't require margin. any advice or thoughts?

[@JakeBroe]

Hey stuart! Margin is nothing to fear. It's a line of credit you don't have to use. But when you trade options (especially spreads), your broker requires it so your account is capable of moving stuff around should you be exercised on. I would just turn on margin if spreads are something you are interested in.

[@BahadirSimsekMD]

Great videos on options, Jake!

[@methioswar2916]

Hi there, great vid! What im failing to understand, with the iron condor, or a credit spread. Is HOW the call actualy substitutes the actual 100 shares. if you sell a put at 310 and buy a put at 305 for protection. if the stock actualy drops to 310 and you get assigned. its all nice and dandy that i can sell em for 305 but how does it help me?

[@ShishirPande]

This is a great video explaining it much more simple way. One question, what happens if the stock price is in between buy and sell? We will be forced to sell it or buy it right? There has to be some catch here, otherwise, everyone will be making money here.

[@JakeBroe]

Hey Shishir! You always want to close everything before expiration. I explain the dangers of holding spread in to expiration in this video about pin risk: kzbin.info/www/bejne/g2e4lax7mt-Xjac

[@angelodente3069]

Thanks for the video but I was looking for examples of possible scenarios for each strategy as you do in other videos. I was waiting for an explanation of what happens if only one leg of the spread is executed, does my collateral stays the same? I assume that it's a bad situation and the strategy is worthless?

[@thomasvogelsinger4007]

Great video Do you use a stop ? Thanks

[@Truecrimecommunity]

You wouldn’t with this strategy because they cancel each other out. Setting a stop could cause you to really screw the pooch if you made a mistake. However But what I would like to know, is win loss % of this option strategy (I realize it’s different for every person) but is there a way to know a market average? I mean $149 to $135 is not a big move in a month, and In order to make money you need to sell a lot of these. So if you ate wrong 1 time , it would take you being right 4 months in a row just to offset that loss. So if you were wrong just 3 times in would take you a full 12 months of winners to offset 3 bad bets. So I'm not sold on this, or I am missing something? I mean it would only take a 5-6% move against the direction you thought it would go based on this example he gave, in order for you to lose your ass. What am I missing?

[@THUVU62]

Should I buy to close immediately if it is ITM or wait to close to DTE? What if is it is deep ITM, is it more expensive to buy to close?

[@lucygoose6052]

Excellent explanation!

[@miggsjb4046]

Please psrdon my ignorance. The entire time I'm watching this, I'm wondering what happens if the stock price ends up between you're 2 strike prices. So in the 1st example if the price hits 150 (between the 149 call you sold and the 152 call you bought), you would have to initiate execution of the 152 call? When? on exp date? How do you know when to do that? Thanks in advance.

[@shaunglendinning]

Great video Jake! If you don't mind me saying so, you are a natural! (teacher}

[@boss_playakingpin7579]

Newbie Question. When you create the spread, and the collateral generates, do you have to have that collateral amount in your account?

[@deviambati3805]

Jake, thank you for a great video on CREDIT SPREADS. You can select the spread with two legs and transact. Can we do the same while closing as one group for both legs or have to close one leg after another?

[@JakeBroe]

Hey Devi! Your broker won't let you sell to close the contract your bought until AFTER you buy to close the legs you sold. This is so because you don't want to have a naked short position as that provides unlimited risk according to the broker.

[@chicagoopportunity2963]

Great explanation! Subscribing asap!

[@JacksonWelch]

Robinhood sucks for these spreads. On the day of expiration they will automatically close your options for you one hour before market close. I took a $78 loss instead of a $117 gain. I am now using webull.

[@fhpchris]

It is really risky to hold all the way to expiration because you can get assigned right after market close and take a huge loss. Someone on reddit had a "max loss" of $500 and ended up taking a $30,000 loss on TSLA (kzbin.info/www/bejne/qKW5d51vo7eFetE)

[@JakeBroe]

Oh, wow. I actually didn't know this. Robinhood must have instated this policy after that teenager committed suicide after his account showed -$700,000. Crazy!

[@multimeter2859]

Sorry this isn't related to the video, but I gotta ask. Were you prior enlisted or did you go straight to officer?

[@JakeBroe]

Hey MM! I am a non-prior civilian who went through Officer Training School with the Air Force to commission and become an officer.

[@dhirajt]

been waiting for this for a while. Thanks! for a bull put spread, if the put we sold is ITM before expiration is there a chance that we might get exercised? Does the put we bought protect us in that case?

[@JakeBroe]

Yes, if your contract you sold is in the money, then you will be exercised on even if the share prices does not reach the put you bought. To avoid being assigned and having to buy the stock, definitely buy to close the contract before expiration.

[@smartdoorsinc.5704]

Great explanation! Most KZbinrs show this strategy as a way to grow a small account due to limited risk and smaller collateral. I’m wondering what strategy big accounts use. Same or maybe cc and csp I’m don’t have that “problem” but just curious Thanks Jake

[@marcosdepaula3593]

Jake, how difficult would it be do set up a Call or Put credit spread on Vanguard?

[@rpphoenix8253]

What happens in a call or put spread if the stock proce finishes in between the range at expiration date? That's the only thing I don't understand.

[@djarretmagbee]

Maybe you answered this question already, but what happens if the stock price/contract expires between the buy and sell strike prices?

[@michaelbigham3367]

Boom. I came to the comments looking for the answer to this question. Maybe there’s a video on this.

[@michaelbigham3367]

There is a video on this :)

[@aptlife1075]

Hey Jake thanks again for the vid. Hope you do a video on using call debit spreads for the dead hand strategy. I'm curious to see how that would play out for us small account guys.

[@JakeBroe]

I am thinking about that! As soon as I figure it out, I'll make a video!

[@ctkmobambi]

Do you have a video on how to read the account summary section on any trading platform properly ???

[@anirudhprabhu9013]

HI Jake, had a quick question on this video. Is it possible to get out of this spreads before the expiration? Can you help do a video on that? For ex: Let me say, I put on PUT credit spread, I locked $5000 on collateral in an attempt to make a grand. But around thursday, if the price is nearing the strike price, can I just close on this and minimize my losses?

[@JakeBroe]

Yes, anything you "sell to open" or "buy to open" you can "buy to close" or "sell to close" at anytime to get out of the contracts and minimize losses if the share price is moving against you. Cheers!

[@dookie6734]

Does Schwab wait for both option order to be accepted before actually following through on both transactions? Like in your first example if your buy to open went through at 1.49, but the 2.27 sell to open price changed while you were on the order screen, what would happen? Do you have to scramble to create a new solo sell to open order to match it, or would the whole thing not go through until the sell to open price came back to 2.27?

[@JakeBroe]

The order chain defaults to the buyer's bid and the seller's ask. You pay the entire value of the spread to get the contracts. If you are trading on a stock with high volume, you'll have no problem getting the contracts. However, on a lower traded stock, then yes, you might get one leg without the other and have to adjust. I recommend avoiding spreads on stocks with low trading volume.

[@dookie6734]

@@JakeBroe Awesome, makes sense. I just started on covered calls so I’ll probably stay there for a bit until I get more comfortable. Thanks so much for the channel, I didn’t think much past target date funds until I found your videos.

[@cleaner1984]

Hi Jake, great video! Later when you went to exit the Credit Spread, is there a way on the brokerage account to Buy to Close and Sell to Close exactly at the same time by clicking on a single button somewhere on the interface?

[@MrDeadlyCrow]

What to do when price bumped higher then my calls? Anything I can do or just realize the loss?

[@behrensf84]

for vanguard you have to call the options desk to do that... the platform wont do simultaneous trades

[@JakeBroe]

Oh, wow. Yeah, I honestly don't even bother with Vanguard these days. Their website doesn't really want you doing anything other than buying and holding their mutual funds... which, i get it, lol

[@mrwsilva1]

Hey Jake, I tried doing a bull put spread today on my Schwab today (approved options level 2) with AMZN and it said I didn’t have enough buying power. I had about 2K in cash and up to 4K and change for long and short term options in buying power with margins but the order would’ve only cost $750 when I hit the review order button. What did I miss in your video? How much buying power do I really need, the same as a cash secured put?

[@JakeBroe]

If it was a credit spread, then YOU would have been paid a credit of $750. The buying power you need is the width of the strikes, but you probably need enough initially to get in and out of the two contracts individually... which with Amazon might be significant.

[@mrwsilva1]

@@JakeBroe Ok, that may be the case. I'll try again next week using smaller priced stocks. As always, appreciate the info. Thanks Jake!

[@nijlee]

Same. I am level 2 with Schwab and threw 10k in there to play with but my vertical credit spreads get rejected for not having enough capital. I think Schwab wants you to still have enough cash on hand to cover for the sold put. Defeats the purpose of doing this 🤷

[@mrwsilva1]

@@nijlee Hey, I just figured it out. It said I didn't have enough capital because the spread was too big. Every $10 in price difference was a thousand dollars I needed as collateral. I did a simple$30 difference in the spread and it took it cuz all I needed was 3 thousand as collateral. Pretty amazing actually.

[@gflem]

30% delta. Thanks for that

[@raymondsimmons1617]

Thanks for another educational video on options. This video was mostly error free and easy to understand.

[@JakeBroe]

Haha, thanks Raymond! Spreads is a huge topic and this was just meant to be an intro. I'll be talking about these spreads more in depth in the future. Cheers!

[@raymondsimmons1617]

@@JakeBroe People like these investment strategies because they can make more with less money. I consider it very risky. Have you used spreads? If so, any success?

[@Reza16888]

Hi Jake, what if the stock price ends up in that band? The sold Call/Put get exercised, but the bought Call/Put does not.

[@markplymale]

Video on iron condors?

[@JakeBroe]

Coming soon!

[@johnsnow9232]

Excellent video

[@moritzgottschalk7185]

What if you are getting assigned after crossing the strike of the short position and don't have the cash to pay for it? Couldn't figure out what my broker will do.

[@xxshcxx]

Great video! So to clarify, the "max loss" that a broker discloses when setting up the trade is not actually the max loss? If the trade goes horribly wrong, it can eat up your collateral that was put aside too?

[@JakeBroe]

The max loss is the width of the strikes minus the credit you received that day. That is the amount of collateral your broker ties up since that is the most you can lose in intrinsic value at expiration.

[@dboone9781]

Can I get assigned 100 shares if expiration is in the money? Or is my max loss the most I will lose?

[@JakeBroe]

Hey D Boone! I would never hold any spread in to expiration. Always 100% of the time buy to close and sell to close both legs.

[@technicallyspeaking6037]

My man, I love your videos on the Ukraine Russia War -- now discovering you're a trader too -- will you be my best friend?

[@jerryball7783]

Hi Jake, very nice video on Credit Spreads! I'm wondering if Swab or other brokers allow trading Vertical Spreads inside an IRA account. I have Fidelity and they apparently refuse to allow it since they view it as a level 3 margin requirement. But I suspect that other brokers allow it. I'm I correct?

[@Stocks_Up]

Don't you need level 4 trading to sell a car or put?

[@evillaroman]

Can you do this ‘manually’ if you’re only approved just for level one?

[@JakeBroe]

You can try! See what your broker does.

[@arya_s782]

Can u show how to close a spread on fidelity?

[@amyamy1727]

This cannot be explained any better. Please do you have a video on how to close and price. I understand that you do the opposite to close but what price do I choose? Also, can you please explain same day expirations for index trades?

[@zsynhgd]

excellent!

[@JeepingInUSA]

i don’t see how this only ties up 350 in collateral. if your sell option gets exercised you are abligated to have 1490 worth of apple available. even if you acquire those at the 15200 total via your buy option. it still means you reserved anywhere from 14900 to 15200 in your bank account(unless doing margin) in which case i suppose yes, you would only need the 350 dollar difference on hand.. but at that point couldn’t use just use margin for that 350 collateral. and if you 10x the quantity that means your max loss is over 2k correct? someone please explain because i can’t see a practical scenario to use this method…

[@weeb3277]

and what happens if you end up in between?

[@johny12576]

Essentially, the second contract position acts as a stop loss

[@cptrex-7567]

Do iron condor/butterfly and debit spreads next

[@JakeBroe]

Yep! Those videos are coming!

[@moxiangmingxin]

How much is your option trading commission?

[@JakeBroe]

With Schwab it costs $0.65 a trade and that is what the CBOE charges, so Schwab takes nothing.

[@johnsnow9232]

Excellent

[@druvaciam5407]

Why did you tell that a broker do not allow to sell naked calls? Most brokers allow naked calls, only collateral requirements differ across brokers.

[@RobtJude]

Best advice - Close the contracts OUT - Don't get Assigned

[@Nice-Y]

Next: Iron Condor 🦅

[@JakeBroe]

It's coming eventually!

[@behrensf84]

can you have only one leg be exercised?

[@JakeBroe]

Yes, the call or put you sold can be in the money and exercised on while the further out call or put you bought remains out of the money. But your max loss is still defined.

[@jimsmith7716]

​@JakeBroe then how could the collateral only be $350,, if you may have to buy the shares say at $150.. ( in-between the spread)?

[@matthewsherwin8741]

Hey Jake, I apologize if I made you in any way uncomfortable or angry with my post about a will or eventually having some sort of fixed income in your portfolio. Please forgive me. The last thing I would ever want is for you to pass away especially pass away prematurely. Really! If you’re comfortable with your sister getting everything then of course you don’t need a will at least not at this time. I’m sure you’re smart enough to make future decisions when the time comes. 🙂👍

[@JakeBroe]

You are over thinking things Matthew! No worries!

[@matthewsherwin8741]

Ok, good to know! 👍

[@62orbetter4]

Jake. do you still do these trades? Do you still believe in this concert?

[@thangthai9109]

wait what a surprise, I though you are that dude that cover ukrain, what a surprise

[@nightelf7921]

But the risk/benefit is pretty bad.

[@JakeBroe]

Yes, the $$ amount risked is high for the $$ premium collected, but the probability of losing is low and gaining is high. Options is a game of probability and weighing risk to reward.

[@nightelf7921]

@@JakeBroe By the way I have an option level 1 and yesterday I asked Charles Schwab for the level 2. They sais that I need 6 months with optiond enabled in order to enable level 2.

[@ATLJB86]

spreads are not very profitable but they are low risk strategies… Too many stocks are trading sideways… Weekly Short Iron condors are working lovely for me!

[@JakeBroe]

Nice! I'll be making a video on the Iron Condor soon!

[@behrensf84]

you also need to look at the probability for each leg of the trade...

[@JakeBroe]

Yep! I'm going to do some more examples in future videos and we'll talk more about probabilities on the spread. Cheers!

[@westsidecater]

You're seriously a Biden supporter?? Wow.

[@enki5420]

no risk manger part, bad video.

[@TheSnakeGuy]

I have a question; why wouldn’t you get it closer to the expiration date? Is it cause it’s too risky? I’m just trying to understand that if a person knows the stock price isn’t going to go up or down. Why not collect premium every week or so? Instead of allowing for a whole month bounce back essentially?

[@Truecrimecommunity]

But what I would like to know, is win loss % of this option strategy (I realize it’s different for every person) but is there a way to know a market average? I mean $149 to $135 is not a huge move in a month, and blue chip stocks have that happen all the time and In order to make money you need to sell a lot of these. So if you ate wrong 1 time , it would take you being right 4 months in a row just to offset that loss. So if you were wrong just 3 times in would take you a full 12 months of winners to offset 3 bad bets. So I'm not sold on this, or I am missing something? I mean it would only take a 5-6% move against the direction you thought it would go based on this example he gave, in order for you to lose your ass. What am I missing?

[@patrickhenry7416]

Dis liked due to passive income statement lmao what a joke to try and say credit spreads can be seen as passive income. It’s a trade where you collect a premium to lose more than collected if wrong. Yeah that’s passive lmao 🤡

[@johnsnow9232]

Excellent video.