Debit Spreads (Vertical)
$Virgin Galactic(SPCE.US$
If you don’t trade Debit Spreads, I would def look into them!
- Less Risky
- Less Expensive
And depending what type of Debit Spread you trade (Calendar, Diagonal, Vertical), you can still profit sometimes even if the stock goes completely opposite than your trade (Calendar and/or Diagonal Spreads are best for that).
My trade below isn’t HUGE Profit but it’s a perfect example why Debit Spreads are awesome!
I bought (5) of the 12/10 16 Calls and sold (5) of the 12/10 18 Calls for only $29 each.
The Calls I bought are rising in value since they are closer ATM (now ITM)
The Calls I sold are dropping in value since they are further OTM (and THETA is hurting them much more)!
Since the Calls I bought are rising and the Call I sold are falling, I am in Profit!
If you don’t trade Debit Spreads, I would def look into them!
- Less Risky
- Less Expensive
And depending what type of Debit Spread you trade (Calendar, Diagonal, Vertical), you can still profit sometimes even if the stock goes completely opposite than your trade (Calendar and/or Diagonal Spreads are best for that).
My trade below isn’t HUGE Profit but it’s a perfect example why Debit Spreads are awesome!
I bought (5) of the 12/10 16 Calls and sold (5) of the 12/10 18 Calls for only $29 each.
The Calls I bought are rising in value since they are closer ATM (now ITM)
The Calls I sold are dropping in value since they are further OTM (and THETA is hurting them much more)!
Since the Calls I bought are rising and the Call I sold are falling, I am in Profit!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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- Market Investor since 1992.
- Options Trader (8) Years
- Crypto Trader/Hodler (2014 - Present)
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Wave with Dave : Teach me the way...
SoggyBottom OP Wave with Dave : Just study and study and study! It doesnt happen overnight!
Most (new) Option traders don’t put the time in to learn how Options work. They just jump right in having NO CLUE what theyre doing!
While you study make sure you “Paper Trade” Options on brokers that have Options Paper trading!
That way you can see how they actually work without using Real money.
Most New Option traders WILL LOSE ALL of their money trading Options!! Why ……. Because they don’t put the necessary time in to learn!
Wave with Dave SoggyBottom OP : Guilty, I have won a few, but definitely in a losing battle. Paper first….will do. Thank you.
70957218 : Thanks. How do you get to the vertical spread menu? I just could not find it in my option chain of iphone app. I am approved level 3