Option Credit Spread Trading – Limited Risk with Limited Profit

August 24, 2010 by  
Filed under Option Trading

I started trading options in the late 90’s. After selling my first option and collecting an immediate credit I and became an option seller for life. I became a student of option selling strategies and started selling covered calls on stocks I brought and owned. I was doing OK collecting premiums month after month until a few of my stocks tanked and my losses over a 2 month period wiped out 6 months of profits. My mistake was picking not so good stocks for this covered call option selling strategy. So I became a student again and discovered an option trading strategy that is truly amazing.
Selling Option Credit Spreads on the broad based stock indexes was my new strategy. My goal was to collect premiums each month using OTM (Out of The Money) options spreads, specifically Bull Put Spread and Bear Call Spreads on the SPX index. I was choosing spreads that were very far OTM so that I had a greater cushion which reduced my risk.
Selling spreads is more akin to waiting for the big move to occur and it rarely does. Time decay is very relevant because despite being a spread, the spread does have a significant rate of decay in the last week or two. The beauty of this strategy is that you do not necessarily need to sit on top of it all the time. If your strikes are 40-60 points OTM and the SPX is up 1. 20 today, you gain nothing by checking the quotes every minute. You can just check in the morning and at the close at your leisure as long as you are sufficiently OTM. When the market starts moving closer to your short strike, some due diligence is required. With credit spreads you want the position to expire worthless or buy back for way less that you sold it for.
The goal is to collect premium month to month. Using OTM spreads is a way to do this without predicting the market for the month. In any given month, the market can still move sideways, lower or higher and your positions will still be profitable. You are trading without concern over market direction for a major crash lower.
Today I employ a very safe and conservative Iron Condor credit spread trading strategy. My strategy with iron condor trading is to leg into the trade by selling the Bull Put Spread first for . 20 – . 25 cents. This is only a 2% – 2. 5% return but the trade is very safe and the short strike is usually 60 points or more away from the current index price. I will then complete the condor by selling the Bull Call Spread later on for another . 20-. 25 cents, but only if the trade is safe. Safety is the key to my strategy with a goal of earning on average a 3% return each month.

Brad Griffin is an Accountant and CPA and has been investing in U.S of the Stock market by 10 años and the markets of options for the últimos 5 años. Now I am sharing my knowledge and the options of éxito in the TRADING in my p

Can A Currency Trading Class Help You Succeed In Trading?

August 20, 2010 by  
Filed under Currency

If you want to learn to trade currencies, also known as Forex, there are infinite amounts of free information available online that can teach you everything you need to know. So is there any point to take a kind of currency trading, you can get some benefit from taking a class, but there are some things you should be careful when selecting one. One of the benefits of taking a class is convenience. Instead of searching the internet for what you want to learn how education can be rationalized. Part of the problem with learning on their own, although the information is free may be available, you may not know what information must be the search and learning. One thing to keep in mind a kind of currency trading is overwhelmed with too much information and not enough attention on the development of good business habits. May be common for a class to offer a lot of information but without developing the discipline and consistency in their personal trading information can be as good as the value for you. If you are manually trade currencies, shares, commodities or financial markets, the most important thing is that you can develop your inner game. Your success will be determined by their trading habits more than anything and this is mainly developed through practice and effort to learn more information. If you are a beginner and decides to take a kind of currency trading, you do a great favor if you choose one that will focus on developing their trading habits rather than just teaching the facts about trade. The best way to develop these habits is through practice. Practice a demo account instead of using real money. If you learn a new strategy that commercial practice, without focusing too much on whether your demo account makes money. Do not be discouraged if you lose money at this time, instead focus on being consistent and disciplined in your trading. These skills can take time to develop. Give yourself several months or longer before you expect to start using real money. Learning to trade is not getting rich quickly. If you want to earn money right away will probably be better with automated trading. With automated trading can use a program called an expert adviser, sometimes called a robot that can be installed on your trading platform. These programs are easy to install and are programmed to operate your account for you with a negotiating strategy pre-installed. Since a computer program, unlike a human operator and is consistent and does not have to learn, just does what it is programmed to do. It will watch the markets and trade for you without you even being there. The key is to choose one that is based on a proven strategy proven .. Look at the forex robot forex market that I use live and see how a foreign exchange expert advisor can make money for the autopilot.

http://forextradecurrency. Art

Options Trading System (2 of 3) by San Jose Options

August 11, 2010 by  
Filed under Option Trading


www.sjoptions.com WE JUST GOT BETTER! We already had some of the safest option trading strategies ever taught anywhere, but one thing leads to another, and we just got even better! RECENT DISCOVERIES : RISK-FREE INSURANCE Recently, weve developed a Self-Adjusting trading system which in a few words is Simply Amazing! What weve done is discovered a way to trade with nearly Risk-Free Insurance. What this means is that the insurance we use to protect our trades virtually risks nothing if we do not use it. In a normal situation, insurance strategies lose money each month and eat up your profits, but weve designed a way around this problem! A REAL-LIFE TRADING EXAMPLE Lets say you want to trade an Iron Condor, but you want to do this with insurance to the upside and to the downside. Well, 99.99% of all option traders only know how to design a trade where the insurance will eat up most of the profits if the Iron Condor is profitable. With our newly designed Risk-Free Insurance Method, we can trade the Iron Condor with surrounding insurance plays which do not take away from the Condor profits. In fact, many of the insurance plays will also make money while simultaneously adding insurance to the position! STRATEGY FEEDBACK Student feedback on this new strategy has been more than awesome, and I am loving it myself. In all my years in options education as a former student and now as a mentor, I have never seen or heard of this technique. Students are saying that I invented this

Next Page »