So is the goal to close positions when the call you bought reaches 70? Or you wait to see how close it gets to 80?
@NickBarling15 күн бұрын
Nothing to critique the CDS, I like it! It might be better to add some detail and correct the premise that the max profit is $1000, it is not. As you know the max profit must take into consideration the Limit price, and deduct that to get a max profit figure. So, max profit is: spread width (1000) - limit price (aka max loss) (2.86) = 714 in your example. You could also mention that the trader can choose the Limit price (Bid/Ask) and may get a slightly more favorable limit price. The second part of the trade was really sweet and I think 55 is a sensible choice and leaves room to roll within range of success. Love your posts, keep it up.
@BestStockStrategy15 күн бұрын
👍
@babycutezz566515 күн бұрын
agree.. max profit is about $700 = $1000 - $300 (cost)... it's a good trade although I don't think buying at $55 is a good deal.. I'd wait until it drops more
@BestStockStrategy15 күн бұрын
@babycutezz5665 the call debit spread is financed by the puts. Meaning your max profit on the trade would be if the calls expired ITM leading to a max profit of $1,000
@BestStockStrategy15 күн бұрын
And actually, the max profit is more than $1,000 since we collected $60 for putting this on.
@Tiozãocomopções15 күн бұрын
How to structure the trade and being aware of the responsibilities of selling a contract are essential to risk management. Thanks, David. Once again, great video.
@BestStockStrategy15 күн бұрын
Thanks 👍
@Mreffrod15 күн бұрын
Great trade, Thanks David!
@BestStockStrategy15 күн бұрын
Glad to help
@Mreffrod15 күн бұрын
If I put a limit trade for the day, and the market is closed (National Day of Mourning), will it keep it, and execute the trade tomorrow?
@BestStockStrategy15 күн бұрын
@Mreffrod if you set it up it as a GTC then yes
@Mreffrod15 күн бұрын
I limit sold it for the “day”, and it is still “open”. I’ll check on it again tomorrow.
@BestStockStrategy15 күн бұрын
@Mreffrod 👍
@ghg611803 сағат бұрын
Thank you so much. I revisit this video just to comment on my trade result. I followed your trade suggestion and made $1k from just 1 combo! I bought 45 days expiry and closed at 21DTE Could you consider posting more of such trade suggestion? Thanks a million!
@BestStockStrategy3 сағат бұрын
Yes, this trade made people a lot of money. Glad to help 🙏
@sparth198915 күн бұрын
This is a wonderful strategy David I’m going with this trade :) thank you !!!
@BestStockStrategy15 күн бұрын
Glad to help
@michone7714 күн бұрын
Thx David, nice stuff as always. In your opinion, would it be wise to buy ITM leap option on pltr, during this correction?
@BestStockStrategy14 күн бұрын
I prefer OTM but I'm not against itm either. May I know why you prefer an itm call vs a slight OTM call?
@michone7714 күн бұрын
Well I see it as a safer solution, although the premium is a bit higher. I would maybe sell it before expiry when stock goes up in a few months or so..
@BestStockStrategy14 күн бұрын
@@michone77 sure, you can do that. I'm not against it 🙂
@babycutezz566515 күн бұрын
Good Trade, but how do you know if Palantir is going to go up? Thanks
@BestStockStrategy15 күн бұрын
No. Nobody knows what will happen in the future.
@PAWANGUPTA-ey4mg15 күн бұрын
Yes, high upside and allows people to buy at a lower price then run the wheel.
@BestStockStrategy15 күн бұрын
Yup!
@GoLongTeslaSpceX15 күн бұрын
Great trade David,,, So that everyone can understand this better, could you please add a little more detail regarding what happens if the stock price closes at sat $69 at expri, as well as, if the stock closes in between the $70 and $80 strikes, say $75, also, if the price is at $81 and finally, if price is at $54 at expri?? Could you please explain the P & L for the scenarios above? Thank you!
@BestStockStrategy15 күн бұрын
I'll explain that in future videos
@GoLongTeslaSpceX15 күн бұрын
@@BestStockStrategy cool, i look forward to it. Cheers!!
@jeffna180215 күн бұрын
Interesting trade. IF the price continued to fall and went below 55, what would your next recommendation be? Sell covered calls to fund a put hedge? I'm a pretty hard luck trader, so I always expect the worst (when I'm lucky, my account goes sideways).
@BestStockStrategy15 күн бұрын
It depends on the situation and overall market whether I'd roll down the $55s or take ownership.
@aaronsarinana165415 күн бұрын
By the way, what's the name of the strategy? I like it! I'm interested in knowing how you manage the trade. Are you okay with a double assignment on the put side? What do you do if the price goes up and, near expiration, it's at, say, $75? Could you share with us how you manage the trade?
@BestStockStrategy15 күн бұрын
It's a structure that I use frequently. I'm unsure if it has a name. If it's at $75 and you don't want to take assignment of the shares then I'd close out the call debit spread for a profit. Yes, I can share how to manage it in future videos
@aaronsarinana165415 күн бұрын
Thanks man!
@dgaz30577 күн бұрын
Is it too late to do this trade? its 72 now
@BestStockStrategy7 күн бұрын
I wouldn't do it now but I also wouldn't say it's too late
@dgaz30577 күн бұрын
@@BestStockStrategy maybe wait for a pullback to 69
@JetanKumar-dj3th15 күн бұрын
once people understand options, they'll never use stocks again.
@BestStockStrategy15 күн бұрын
👍
@handdle-h2o15 күн бұрын
Thanks David ! Now then compare and contrast to using feb 2026 calls (as to feb 2025) ie give it room to rumble
@BestStockStrategy15 күн бұрын
Yes, you can do that too!
@udarpavarota39615 күн бұрын
I didn't understand a single thing. You recommend buying a bullish vertical spread on Palantir for next month? So you're saying Palantir is going to be over 80 by February 14, when it's now at 68? Kind of risky if you ask me.
@BestStockStrategy15 күн бұрын
It doesn't have to be over $80. I made money by putting on the trade.
@aaronsarinana165415 күн бұрын
One of the reasons for PLTR's significant drop has been the price downgrade by MS to $60. I believe that's its fair value. So, selling a put at 55 makes sense to me.
@BestStockStrategy15 күн бұрын
No one really knows where the stock will trade. Analysts are guessing too. Long-term, it'll likely go higher. Hence why this structure works out well. Reduced downside risk plus capturing the upside!
@aaronsarinana165415 күн бұрын
@@BestStockStrategyI don’t think the price analysts set is simply "a guessing". They use valuation models based on the company's fundamentals, so I’d say it’s a very educated guess! Although, certainly, the models often fail too. However, they need to base it on something!
@BestStockStrategy15 күн бұрын
@aaronsarinana1654 true. You'd be surprised though. I worked as an investment banker and put together a lot of financial models. You can search my videos to see some of them. Predicting future revenue and cash flows is basically guessing. It's never correct Plus, what valuation method did he use? Comps? DCF? A blended model, etc. These are just my thoughts when I hear about an analyst price target 🙂 Maybe I'm jaded! Some analysts are more accurate than others though. I do think it's worthwhile to lookup that specific analyst and see how his prior price predictions have done though. All the best 🙂🙂
@aaronsarinana165415 күн бұрын
@@BestStockStrategy I believe you!! Haha 😊
@mightymouse178015 күн бұрын
The stock may have been downgraded, but with its government contracts and future collaborations with NVIDIA, it has strong potential to recover. Hedge funds have already taken their profits, and now they’re strategically waiting as small retail traders like us sell off. Once the stock dips further, these institutions are likely to step back in, rebuy, and drive the next uptrend. It’s all a calculated play by the big corporations and hedge funds on Wall Street.
@BestStockStrategy15 күн бұрын
👍👍 I'm bullish long-term too!
@lisagreebel862915 күн бұрын
I have to comment here. Sorry, but: 1) there is info missing regarding your Call Debit Spread (aka Bull Call Spread) . You mention the cost of the trade is "only about $3" which is misleading. It is $3 times 100 which is a cost of $300 for the trade. 2) You also state that the profit for a 10 wide spread is $1,000 for this trade. This is incorrect. You have to deduct the cost you paid for the trade from the profits (only makes sense, no?). The max profit on the trade comes to "approx" $670. (forgot to add: the math here was using a long call cost of 6.05 [deduct this cost] and a credit for the covered call for 2.75 [which you add in]). Side-note: selling the cash secured puts is a nice add. If price closes above the put strike price, keep all the premium collected (which, of course, I definitely prefer over having to own the shares). First time watching this gentleman (the stream popped up on my phone for some reason).
@BestStockStrategy15 күн бұрын
Technically the max profit is $1060 if PLTR is trading above $80. We collected $60 for putting on the trade and then the calls would be ITM and closed out automatically for a $1,000 profit. The cost of the call debit spread was financed by the naked puts. So the max profit of this trade structure is $1060.
@sparth198911 күн бұрын
Hi Lisa, i know your comment was for David but i just wanted to add to your first part of the comment that when David says the cost of the trade is only 3$, most of us traders know that it means 300$ as 1 contract is 100 shares… :)
@BestStockStrategy11 күн бұрын
@@sparth1989 yup!
@dgaz30579 күн бұрын
its at 68 now, and that trade is not 1000 max and its not 3 dollars, its 300 dollars
@BestStockStrategy9 күн бұрын
The max profit on that trade is $1060.
@dgaz30579 күн бұрын
@@BestStockStrategy on thinkorswim it says 692 and cost is 309, what platform are you using robinhood?
@dgaz30579 күн бұрын
@@BestStockStrategy my response got deleted. More fake news.
@BestStockStrategy9 күн бұрын
Call was financed by selling puts. Picked up $60 credit when putting it on. Max profit of call credit spread is $1000. $1000 + 60 = 1060
@dgaz30579 күн бұрын
@@BestStockStrategy OK I have to put up collateral until the 14th...so its a custom order not sure what to call it...looks good. I'm trying to find someone to trust on you tube...
@johnnolan255715 күн бұрын
Pltr to 0!
@BestStockStrategy15 күн бұрын
You really think so?
@johnnolan255715 күн бұрын
@BestStockStrategy yes, fraud!
@BestStockStrategy15 күн бұрын
@@johnnolan2557 interesting, well let's see what happens!
@johnnolan255715 күн бұрын
@@BestStockStrategy it was just at $17 two months ago. It's been hyped