Why Bull Put Credit Spreads Are My #1 Stock Options Strategy

What's up Fruitful Investors!
If you are looking for MASSIVE cashflow every single month that out performs Real Estate, Regular Stock Buying & Even Crypto?
In today's video Im going to be going over why bull put credit spreads are my number one stock options strategy, and why I think you should consider using this strategy for your options portfolio as well.
If you understand options a little, then this video should make sense to you. Not only do I think that bull put credit spreads are the safest strategy but they are also the best for beginners, heres why.
When you enter a put credit spread trade you are betting that the stock wont go below the strike prices (stock price you choose). The stocks prices can go up, it can go down, left, right, backwards (you get the point) but as long as it doesn't go below your strike price by the contracts expiry date, you keep your money.
Essentially how this works is you get paid by someone for promising to purchase their shares if it drops to a certain price, and then you also pay someone else less money to buy the shares off of you if it falls even lower. What you are doing is hedging your bet. You will pay someone a portion of the money you received and keep the difference.
The reason i think this is the best strategy is because you are capping your potential losses as well as increasing your ROI by using less money in the deal.
The other reason I think this strategy is great is because it doesn't require a ton of money to get started. Although I would recommend starting with a minimum of $5000 USD, you can technically trade with $500 if your broker doesn't have an account minimum.
Enjoy the video!
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[@TheFruitfulInvestor]

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[@Abouthisloot]

I like everything that you said only thing is with put credit spread is I like when the theta is rapped up so Ive been playing them weekly on $SPY but besides that solid video and solid information brother

[@chimchu3232]

Thank you for the tips, i got burned recently because i failed to properly manage my put credit spreads, i should have rolled them down in strike, but i kept telling myself it would bounce before my expiration date. Most of them did not, and i took the max loss. This is a great strategy, but you will get burned if you do not close the postion and roll if the market turns against you quickly

[@rajalal1]

How do you manage if the price is between the sell and buy strikes?

[@codeminoica8956]

You get assigned, your long put is expires worthless and depending on your account and broker you get a margin call. If you're happy to keep the stock you'll need to add more funds to balance the account. Otherwise, you either sell the stocks at a (bigger) loss or the broker liquidates your position to manage their risk. The "maximum loss" mentioned when setting up the trade refers to the spread, not the funds that will be used if assigned. Hope this helps.

[@urielaquanis4216]

Amazing Insight thanks so much 🫡 Quick question, what delta do you usually look to sell the short strike for your specific 45dte put credit spread ?

[@TheFruitfulInvestor]

Usually around 70%, but really depends on the timeline

[@DASicari]

In your $420 put example @ 6:24, how do you only have to put up $65,000? Don't you need to put up the price of 500 shares x $420 = $210,000 as collateral?

[@tarashrynchuk3118]

you need collateral for naked put not for bull put spreads.

[@ljkb23]

$210,000 would be needed if you were doing a cash secured put. However a lot of brokerages allow you to trade on margin and they allow you to not put up the entire collateral for a put. Depending on the delta (the risk of the put becoming in the money) the lower or higher that requirement may be. In this case it was only 65k instead of 210k (31% for collateral). Of course if the put goes in the money you will need 210k to pay your debt so you better hope you either A) have that money or liquid positions to get that money or B) you buy the put back (suffering a loss) instead of waiting for it to exercise and forcing you to purchase all of the shares.

[@Drek1876]

On expiration day, do you let it expires, or do you close out before the market closes on expiration?

[@TheFruitfulInvestor]

I ALWAYS close them out for certainty

[@Drek1876]

@@TheFruitfulInvestor Thanks

[@Antoine.Gagnon]

I understood the stategy. Can you show us on Questrade? And what about smaller accounts, should we buy cheaper tickers? Thanks.

[@BaccaratDegen]

I currently have the CRM 305/300 BPS. It is currently at the price of 308.82. Is it better to let the spread expire worthless or buy back to close it out before expiry? I received a credit of $2.67 and now I want to mange my risk to the downside. DTE 3/15/24

[@paulaedwards2084]

You should close each trade separately; otherwise, you will get hit with assignment fees.

[@AntonMaroun]

Basically, describing rolling at the end, good video

[@mikehunnewell7412]

You make so much more doing it in stocks you can afford. This is just half of my system. If the stock was assigned to me I sell a covered call otm. This normally locks me in at a 0 risk and allows me to make even more money.

[@svendiamond]

BEST INTRO EVER LMAO

[@TheFruitfulInvestor]

🤣🤣🤣🙏

[@shroudcity8656]

Hey Mat! I found your channel a few nights ago and am totally interested in furthering my education in your program. I am wondering is there a course in your catalog that will focus more on multi family investing? Thanks for the content !

[@TheFruitfulInvestor]

Hey! We don’t have any courses specifically designed for multi family but you can check out the others here in the link in my bio.💪🏼

[@shroudcity8656]

@@TheFruitfulInvestor thanks !

[@michaell3134]

Google: it’s all there and all free

[@raydaypinball]

I love this info as I’ve recently started looking into “safe” strategies. Hilariously the exact doomsday scenario you layed out actually happened with spy currently at $375 😂

[@AfffS-oz5sd]

I mean, yeah that's the problem. One bad day with this strategy wipes out months or even years of gains, and it happens. Also, notice how the contracts are dated weeks away? SPY doesn't need to drop 15% in 1 day, it has weeks.

[@xkkx377]

Same thing happened to me. Credit spreads do not work. Stick to selling regular puts people.

[@gogeta9118]

Great intro video Matt! Is there a way to backtest this strategy?

[@TheFruitfulInvestor]

If you’re looking to try it out yourself, there’s brokerages like IBKR that offer paper trading. You can sign up and trade the market with fake money to get a feel for options before entering with real money. Everything is the same except for the 15 min market delay. Shouldn’t make a huge difference unless you’re planning to day trade options!

[@nastyya19858]

Dude, best video ever!! Love the options content!

[@TheFruitfulInvestor]

Glad you enjoy!! There’s more to come💪🏼

[@nastyya19858]

@@TheFruitfulInvestor thank youuuu!!!

[@gardendwellerTX]

Are you typically holding these til expiration?

[@TheFruitfulInvestor]

Almost never

[@RandallLynn-c6m]

I recently watched a video of how to roll a put credit spread. That is useful I think to learn this. I got to practice rolling put credit spread. Make a video on that sometimes perhaps. Good explanation on this video.

[@MehulGoradia]

What happens when spy closes between the two legs of the put spread? Do I have to buy the 100 shares of spy? Will the broker automatically buy the shares and sell them aftermarket?

[@TheFruitfulInvestor]

Technically yes but the thing is we NEVER let the trade expire. You always want to close it out a few days before expiration OR whenever you get the profits you want. For example it’s normally for me to close out trades at 20-30% decay and that might have only taken 1-5 days, even though I put on a trade that may have been for 45-60 days. Always close them out! 💪

[@darrend9313]

@@TheFruitfulInvestor what are the key reasons to close them out? If they are still far out of the money, can you just let them expire and not have to pay commission to sell them - or am I missing something??

[@kensan73]

Thanks for the video. I know the spread #'s are from 1 year ago, but in 2023 right now I can't see at 43D or 63D out on Spy you can get such a premium. It must be in a bull market you can't get paid these #'s at -8% strike or -15% strike prices. (I even tried with canadian -> usa currency!)

[@sulaymanbarrow7369]

market Changed

[@adamkuperstein6289]

How many times have you needed to buy these contracts back for a loss? Have yo been doing this for years?

[@TheFruitfulInvestor]

I’ve bought a few at a very slight loss, but mostly because I wanted to be OVERLY careful (I.e a baby🤣). The market this year has never even come close to my strike prices

[@PaulAlan21]

That's a nice return if you are financially able to take a chance and sell 100 (10000) contracts on a .27 credit to get the $2700.

[@minaligarg7561]

Great help and knowledge about stocks

[@honsly1]

If the share prices fall between your spread, would you be obligated to purchase those shares at the strike you sold at? the 100 contracts @ $390

[@TheFruitfulInvestor]

It depends, you might be. But you would definitely want to close out the contract before it got to that point. You really NEVER want to let a contract expire on day 0, even if you’re way ahead. You never know what can happen in the after market after 4pm EST. ALWAYS close them out👌🏼

[@honsly1]

@@TheFruitfulInvestor Thanks for the quick reply! I've recently discovered your channel and am trying to learn as much as I can! I think that's what I've been missing, I need to learn about "closing out contracts". Thank you!

[@TREVANDTHECREWgaming]

@@honsly1Robinhood usually auto closes it but like he said, just get out early enough.

[@tomchambers9787]

Hey buddy .. All of your links in the More section are dead.. Can't make no money that way.

[@TheFruitfulInvestor]

Haha check the links in the newer videos. I’ll check these out tho, thanks!

[@Yuri-RA2]

It is little bored coz joking around too much. Overall it is helpful 😊

[@joecastaneda81]

The intro got me. Hahhaha. Great content. I'm a new investor trying to invest in real estate. What a time to enter the market huh? With interests hitting 5.5%.

[@Dixie096]

Is it actually possible to do this with less money upfront? Say $10,000? I’m sure the average Joe does not have 65k to 3 million to play with.

[@justinorwen1141]

Hes probably buying 100s or 1000s of contracts. You can do 1 or 2 if you want.

[@adaptableeffort]

how on earth are you getting those premiums. SPY has never offered that type of premium. i just went to the options chain and went 45 days out with SPY and 15% down and its paying $30 per contract not $327 LOL. there is something off about this vid. idk how he spoofed those numbers, but SPY does not give out those types of premiums

[@adamkuperstein6289]

The nay sayers don't get it. I think they are under the impression you hold these contracts for the whole length of time. BUT, I bet you sell the shit out if these contracts if they make a sharp turn upwards. If you did this all year, you would be killing it.

[@AttilaGyimesi-ot3ok]

Something I cannot get my head around it: if you already made millions from real estate AND make a killing with options, why are you on youtube, why do you do coaching? ROI timewise on those should not come close

[@TheFruitfulInvestor]

Branding so I can continue to raise money so we can keep buying real estate. The courses is just a cherry on top - I’m only here to get more partners 😉👌🏼

[@AttilaGyimesi-ot3ok]

@@TheFruitfulInvestor So all the millions you've made you've already invested, but apparently returns are not coming fast enough (even with your cashflowing options trading) to finance new investments so you prefer to lose a part of that profit to keep growing? why not stop and retire?

[@richardgshields]

Really, you can sell puts? Hmmm

[@TheFruitfulInvestor]

Sure can!

[@AverageDipBuyerX]

Why this guy looks kinda like Saul Goodman

[@CanadianOptionsTrader]

If you like the returns with trading Equity Options, you're going to love Futures Options!

[@rgasta7765]

Do u teach how to trade them?

[@accomplishedtheory9502]

You grinded the shit out of real estate! Tenants and all that bullshit. Where are you getting the number of $65k? Isn’t 500 shares of spy at $420 =$210,000. No way I’m doing this shit tho lol. I made 22% this year just sticking with US equities. I don’t need to get steam rolled

[@TheFruitfulInvestor]

$65k CAD is the max loss if the market price falls through both strikes. The way to calculate is the difference between the strike i sold and the strike I bought (in this example it was a $5 difference), then multiply $5 times the number of shares per contract (there was 100 contracts which means 10,000 shares). 5x10k = $50k USD converted to CAD is roughly $65k. Basically you need to hold $65k collateral with a bull put spread instead of if you just sold a put where you would need to have $3.9M for collateral

[@accomplishedtheory9502]

@@TheFruitfulInvestor oh ok thanks for the clarification. Shits too risky for me. Merry Christmas dude

[@willh6805]

Žhoo isuxuuxuozhi uYep

[@willh6805]

@@TheFruitfulInvestor ihhhhgiyixuxuzhuzuuxzihihhhiz

[@willh6805]

@@TheFruitfulInvestor hihiiiiiiiuixuxuxihcbcb izuyzio I yoxhoizhhhhhohczcxxhhxhxchxxhhhxjigz I h

[@royforest6035]

Good information, but cut out drinking so much coffee...

[@TheFruitfulInvestor]

I legit drink decaf 🤣🤣🤣

[@Soundista]

The risk to reward profile of this strategy is horrible. Why anyone trades options is beyond me.

[@Antoine.Gagnon]

Ok more.

[@TheFruitfulInvestor]

💪💪

[@2195guru]

This is the worst explanation of this Strategy. I have been trading this Strategy (among others) since 1991 successfully. I can't understand that people are complementing for this video. It sucks. If your aim was to help a "newbee" or to make clearer this strategy to a confused trader.... You Failed !

[@deanmitchell7178]

Bad language I don't like

[@michaell3134]

This must be the worst credit spread video

[@TheFruitfulInvestor]

Thanks for the view bud 👋 🤣🤣

[@michaell3134]

@@TheFruitfulInvestor What a clown

[@DjSuperK]

Yeah but you still have to pay money on that earned money and if you have a loss and you buy the same contract to wash that you would be loosing twice. The loss and pay tax on the gain. And you can’t claim that loss of you buy the same stock under 60 days.