Put Ratio Spread Guide (Step by step)

Рет қаралды 24,934

SMB Capital

Күн бұрын

SMB Options Workshop: bit.ly/3Mh283Z
#optionstrading #optionsstrategy #daytrading
SMB Disclosures www.smbtrainin...

Пікірлер: 51

@smbcapital 5 ай бұрын

SMB Options Workshop: bit.ly/3Mh283Z

@MoIbrahim970 5 ай бұрын

Thank you for sharing this wisdom, and putting all the effort to explain every step. Much appreciated.

@smbcapital 5 ай бұрын

Glad it was helpful!

@growwithaaa 5 ай бұрын

Sir, you have an outstanding teaching style. Thanks for sharing step by step on how to use this strategy. Subscribed. ❤

@smbcapital 5 ай бұрын

Awesome, thank you!

@mziobro7934 5 ай бұрын

Great explanation Seth. Appreciate the info.

@bradleygibson9686 5 ай бұрын

Well it appears that Katherine Gauthier and Michelle Stewart Have found A new angle to advertise themselves. They are so successful they have to find a way where they don't have to pay anything. At least someone had the sense to pick the comments section of the best of the best...SMB CAPITAL! I don't have enough time or room to tell you how much you have helped my trading. I am a little upset that you guys didn't tell me that you have perfected time travel. This video just told me the closing price of tesla on October 15, 2024. Now that is what I call having edge. I'd better call Katherine and Michelle for further instruction. Seriously though guys, thank you for another great YT video!

@MelodyJacksonPhD 5 ай бұрын

Excellent strategy!!! Thanks so much!

@Nitrade404 2 ай бұрын

If you just sell a Put instead of a Put Ratio Spread, you would get much higher Premium (roughly 2k for each sold Put) and still get the same number of shares at the same prices. So why should I go for Put Ration Spread instead of just using a normal Put with a higher Premium ?

@facemakerable 5 ай бұрын

Seth is money maker Bravo !

@BJ-fu4zy Ай бұрын

So when the stock goes down, we make the changes on the day of expiration? Or a day before? Selling some, then letting one get assigned is what I mean

@MJQL 5 ай бұрын

Question: 9:15, you're netting +1738 with options, but you also bought 100 hands of Tesla @245, while market price is only 207, that causes another -3800 loss right?? so if that's the case, 13:27, if Tesla never bounce back to $200+, aren't you losing money big time??

@BradHelsing 5 ай бұрын

stocks only go up

@aaddam16 5 ай бұрын

The premise is that you are bullish on a stock and want to own it for a cheaper price. If it doesn't bounce back right away, you need to wait until it does. Of course, there is always a risk that it won't. Don't use money you can't afford to lose or money you can't have tied up for "long" periods.

@osubiht 4 ай бұрын

The starting premise is that you wanted to own 300 shares of Tesla. The outcome of this strategy is that you end up purchasing 300 shares of Tesla at a lower average price than if you had bought 300 shares at the current price on day 1. If the Tesla price at any point in the future is less than the day 1 price, then you will have a loss either way. But with this strategy, your loss will be smaller than if you had bought all 300 shares at day 1. The thing to remember is that you were _always_ going to buy 300 shares of Tesla, or at the very least would be 'comfortable' buying 300 shares of Tesla.

@c.k.1893 4 ай бұрын

@@osubiht I understand that typically a cash-secured put with the same strike as a put ratio spread would have more risk, but I can’t help but question something. In the video, the first trade example starts on August 1st, 2023, for the September 15th expiry. When we focus on a similar premium income, like in this example, the $200 CSP provides a much lower delta (-5.31), lower risk, and even offers a slightly higher premium compared to the 250/235 put ratio spread ($1.12 for the CSP vs. $1.07 for the spread). Given that, why wouldn’t we just go for the $200 CSP instead of the spread? The only potential rationale I see is that we want to get assigned and the $200 strike would be too far OTM. Is that the case?

@cal4865 5 ай бұрын

Short the banks a good idea too!!

@c.k.1893 4 ай бұрын

I understand that typically a cash-secured put with the same strike as a put ratio spread would have more risk, but I can’t help but question something. In the video, the first trade example starts on August 1st, 2023, for the September 15th expiry. When we focus on a similar premium income, like in this example, the $200 CSP provides a much lower delta (-5.31), lower risk, and even offers a slightly higher premium compared to the 250/235 put ratio spread ($1.12 for the CSP vs. $1.07 for the spread). Given that, why wouldn’t we just go for the $200 CSP instead of the spread? The only potential rationale I see is that we want to get assigned and the $200 strike would be too far OTM. Is that the case?

@pixstamp 5 ай бұрын

What is the advantage of the put ratio spread strategy over just selling one naked put?

@ketannandrajog1692 5 ай бұрын

I have the same question

@AlexFerry1031 5 ай бұрын

@christophermatthews4896 had an answer below. I am just putting up some numbers to make it clear. If you had just shorted one put at, say, $235 strike, and got assigned when the stock was at $210, you would have an unrealized loss of $2,500 at assignment. If you had put on a ratio spread as described in this video, adding to the $235 short put a put debit spread (buying the $250 put and selling the $235 put), at expiration when the stock was at $210, you would have a realized gain of $1,500 from the put debit spread to help offset the $2,500 unrealized loss from the other short put. The gain from the put debit spread is capped by the spread distance between the two strikes. The unrealized loss on the naked short is capped at when the stock is at $0. I mention this to highlight the risk in this strategy. Obviously one does not sell naked puts on any stock with price outlook at $0... Equally obvious, at least to me, is that the strategy as outlined in this video cannot be used for consistent profit without reference to support/resistance levels at any timeframe, and, at a more nuanced level, IV levels of the options. See my comment above. Hope this helps. Just to complete the story. If at expiration the stock was above $250, just shorting one $235 put would have pocketed more premium than doing the $235/$250 -2/+1 ratio spread. If at expiration the stock was between $235 and $250, the $235 short(s) would expire worthless. The $250 long put would have intrinsic value. I don't recall this situation happening in this video.

@aaddam16 5 ай бұрын

Less margin required, which leaves you more money to trade. You're selling a put and a put debit spread, extra $, if the strike price stays within your spread.

@pixstamp 5 ай бұрын

@@aaddam16 Understood. But why less margin (for the second short put)?

@aaddam16 5 ай бұрын

The broker sees it as less risky. Create an order for a naked put. Look at the margin required. Create a put ratio spread. Look at the margin required.

@OakSantosh 5 ай бұрын

If we are getting ready for assignment then selling just puts may be less complicated & simpler?

@aaddam16 5 ай бұрын

It's simpler but requires more margin because it has infinite downside.

@Redhood91007 5 ай бұрын

With spreads, I know on the spy and the Q’s on expiration day after hours can push the short leg into the money and if you don’t exercise your long leg you can end up with a nightmare scenario. Is that scenario possible on the spx index? Can your short leg get get pushed into the money after hours on expiration day on the spx index ?

@curtistheconqueror 5 ай бұрын

This doesn’t matter. If your short legs gets pushed ITM, they will exercise the long one for you. No broker is going to leave that in your hands unless you have more than enough capital to take the loss. SPX is same as cash. No assignment.

@Redhood91007 5 ай бұрын

@@curtistheconqueror so when spx closes at 4 on expiration day, there’s no chance for the short to get pushed in? Once it closes that’s it ?

@RedBullishTrading 5 ай бұрын

How does this strategy differ from just selling puts?

@christophermatthews4896 5 ай бұрын

you get the put you sell plus another put debit spread on top of it. so it helps make a little extra money from the stock dropping

@RedBullishTrading 5 ай бұрын

@@christophermatthews4896 I mean like what’s the pros and cons I guess. Or why you would use one strategy over another?

@FootballArtistryExpress 5 ай бұрын

How do I speak with someone about purchasing a course. There are so many and I'm not sure which one to invest in.

@smbcapital 5 ай бұрын

please email support @ smbcap dot com and Rosie or Harry can help you out.

@andersonmill7728 5 ай бұрын

7:45: TSLA Close: 207.33 on Expiration Day. Buy 100 shares at $245 with a unrealized loss of 245-207.33*100=$3,767. Comparing with the realized gain of $1,738 (9:09). This trade is a unrealized lost of $2,029!

@fredrock_22 5 ай бұрын

What if you get assigned early?

@TheWalrus-c2l 5 ай бұрын

Sell 100 shares and the bought put. Leaving you with 100 shares at the lower put strike.

@cal4865 5 ай бұрын

Ok fellas now it’s $DJT $OXY time!!! Bitcoin on the rebound too coming up!!

@rw922 5 ай бұрын

this is one of the worst videos by SMB. this strategy is meaningless...if TSLA doesn't recover, you would still be down. you're better off just selling a simple put and getting assigned.

@TheWalrus-c2l 5 ай бұрын

Bit harsh. It's a strategy well explained in the video. If the stock at expiry is close to the lower strike you have a nice bit of income from the bought put. I am inclined to agree that simply selling a single CCP does look a more appealing strategy.

@FourTetTrack 5 ай бұрын

I think you missed the initial explanation. This strategy works if one wants to *buy shares* which only makes sense if one thinks the SP will eventually go up. This strategy helps to enter the trade at a lower price and lower the cost. The opposite would have been to buy 300 shares on day 1, which would have ended up in a loss.

@edmalin9485 3 ай бұрын

I would have sold a call against the acquired shares. With that said your strategies and explanations are outstanding! Thanks for all you do.

@ktran991 Ай бұрын

@@FourTetTrackYou are fair and balanced!