OPTIONS TRADING STRATEGIES TO KNOW

Option Trading Strategies

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PUT CREDIT SPREAD

A Put Credit Spread is a bullish options strategy that involves selling a put at a higher strike and buying a put at a lower strike and collecting premium without owning 100 shares of the underlying stock. Proper entry is required. This is what this service is for. And we recommend setting a GTC closing order for a 20% profit. This happens buy setting a limit order lower than the credit received since we are a seller of premium in this strategy. If that confused you please make your way towards this link and watch the video on put credit spread.

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CALL CREDIT SPREAD

A Call Credit Spread is a bearish options strategy that involves selling a call at a lower strike and buying a call at a higher strike without owning 100 shares of the underlying. Call credit spreads can be more dangerous and less manageable than a put credit spread because the market is mostly bullish and if the underlying doesn't go back down than you cannot roll the position. Put another way, there is not much defense to a call credit spread so use them sparingly.

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IRON CONDOR

An Iron Condor is when you sell a put credit spread and call credit spread at the same time. The profit zone of the iron condor is in the middle of the put and call credit spread. You are effetely betting the underlying stock will stay between your spreads and stay in that range. This strategy relies on theta decay to be profitable. As always it is not wise to hold until expiration take profits quickly with this strategy. We typically do not use this strategy often.