Credit Spreads Beginner Guide to Option Trading Small Account

00:30:27
https://www.youtube.com/watch?v=_4WyGZ5nJo8

Resumen

TLDRThe video explores the use of credit spreads in trading, detailing their benefits for both large and small accounts, including those as small as $50. Credit spreads involve selling and buying options to limit potential losses while earning premium. The video guides on setting up these spreads across different account sizes, from regular to micro, highlighting considerations such as risk management and strategic entry points. A focus is placed on the importance of understanding stock movements, technical indicators, and market conditions for successful credit spread trading. The trader emphasizes the ability to earn consistent premiums sustainably and shares examples of successful trades across various financial scenarios.

Para llevar

  • πŸ“Š Credit spreads can be traded with accounts as small as $50.
  • πŸ’Ό Allows small and large accounts to earn premiums.
  • πŸ€” Spreads limit potential losses by merging buying and selling.
  • πŸ”„ Understanding stock movements is crucial for success.
  • πŸ“ˆ Use of technical indicators like moving averages is vital.
  • πŸ›‘οΈ Spreads involve more risk than regular options.
  • πŸ“‰ Risk management strategies are key to protecting investments.
  • πŸ’° Consistent premiums can be earned through smart trades.
  • πŸ“… Regular monitoring of stocks aids in better trade management.
  • πŸ” Studying stock behaviors enhances prediction accuracy.

CronologΓ­a

  • 00:00:00 - 00:05:00

    The video begins with an introduction to the concept of credit spreads, explaining the benefits of trading them for accounts of various sizes, including very small accounts. The speaker delves into the basics of options selling, covering options like cash-secured puts and naked calls. However, the main focus is on utilizing credit spreads to earn premiums, even with limited capital, and understanding the risks involved compared to traditional options selling.

  • 00:05:00 - 00:10:00

    In this segment, the speaker explains the process of identifying market movements and the importance of understanding stock behavior. Emphasis is placed on the concept of support and resistance levels, and how it's crucial for traders to 'marry' or intimately understand certain stocks to trade credit spreads effectively. The speaker also highlights the significance of monitoring stock movements and trends to make informed trading decisions.

  • 00:10:00 - 00:15:00

    The discussion moves to practical applications of trading credit spreads, using Tesla as a case study. The speaker discusses strategies for selling put credit spreads, even with account sizes as small as $500. By analyzing stock trends and understanding technical indicators like moving averages, traders can predict stock movements and select appropriate strike prices for trading. The importance of adjusting strategies based on market events, such as tax-loss harvesting, is also mentioned.

  • 00:15:00 - 00:20:00

    The video continues with a deeper dive into trade execution and managing risk while trading Tesla options. Using specific examples, the speaker compares different spread sizes, and how each affects potential profit and risk exposure. The importance of setting up trades that comprise a small percentage of one's portfolio and knowing when to cut losses based on stock movement is emphasized. The speaker also reassures viewers by discussing the high success rate of well-managed credit spread trades.

  • 00:20:00 - 00:25:00

    The speaker introduces strategies for growing smaller accounts using stocks like PayPal and Sofi, emphasizing the importance of choosing the right credit spread type based on stock performance. This section includes a detailed walkthrough of setting up and managing trades with limited capital. By focusing on stocks with stable trends, traders can achieve consistent returns even with minimal investment, thus significantly growing their account size over time.

  • 00:25:00 - 00:30:27

    Concluding the video, the speaker motivates viewers to adopt these trading strategies for consistent income generation. He highlights the importance of understanding individual stock behavior, managing trades carefully, and continuously learning to improve trading skills. Finally, he invites viewers interested in deeper learning to join his training program, providing details on how to participate and gain further insights into successful credit spread trading.

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VΓ­deo de preguntas y respuestas

  • What is a credit spread?

    Credit spreads allow traders to engage in options trading by making both a buying and selling trade, limiting potential losses while earning premium.

  • Why are credit spreads beneficial for smaller accounts?

    Credit spreads allow small accounts to engage in premium-earning trades by using less collateral.

  • Are credit spreads riskier than regular options?

    Credit spreads involve slightly more risk than selling regular options as they require monetary losses if a trade goes wrong.

  • How does the trader determine safe credit spread plays?

    The video explains the use of support, resistance, and moving averages to predict stock movements for safer trades.

  • How can someone with a small account start trading options?

    Investors can start trading options using as little as $50 in small accounts with credit spreads, allowing for affordable entry.

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Desplazamiento automΓ‘tico:
  • 00:00:00
    in this video I'm going to show you how
  • 00:00:01
    to harness the power of credit spreads
  • 00:00:04
    whether you have a big account or a
  • 00:00:06
    smaller account and I'm also going to
  • 00:00:08
    show you for those really tiny accounts
  • 00:00:10
    how you can start trading credit spreads
  • 00:00:12
    and receiving juicy premium for as
  • 00:00:14
    little as $50 let's get right into it
  • 00:00:17
    don't worry about subscribing smashing
  • 00:00:19
    the like button or looking for the
  • 00:00:20
    coaching and Discord link we'll talk
  • 00:00:22
    about that later let's get right into
  • 00:00:24
    credit spreads so first let me explain
  • 00:00:26
    to you what a credit spread is when you
  • 00:00:28
    are selling op ions like cash secured
  • 00:00:31
    puts naked puts covered calls naked
  • 00:00:34
    calls you are selling these options and
  • 00:00:36
    when you sell a put if the stock drops
  • 00:00:39
    below the put option you get ass signed
  • 00:00:40
    and you have to buy the shares at the
  • 00:00:42
    strike price of the put that you sold
  • 00:00:44
    regardless of where the stock price is
  • 00:00:46
    headed the same goes for the calls that
  • 00:00:49
    you're selling when you sell calls you
  • 00:00:50
    are obligated to sell your shares to the
  • 00:00:53
    buyer and if the stock goes to $11,000
  • 00:00:56
    and you're selling a $400 call you are
  • 00:00:58
    obligated to sell your share of $400 no
  • 00:01:01
    matter where the stock goes however what
  • 00:01:03
    do you do if you don't have the premium
  • 00:01:06
    to sell puts to enter stocks to even
  • 00:01:08
    sell the calls to begin with if you have
  • 00:01:09
    a $10,000 account you can't sell puts on
  • 00:01:13
    meta or Google Microsoft Nvidia most of
  • 00:01:16
    these stocks pretty much impossible to
  • 00:01:18
    enter and what if you have a $5,000
  • 00:01:21
    account you definitely can't enter a
  • 00:01:23
    position in any of these stocks well let
  • 00:01:25
    me show you the power of the put credit
  • 00:01:27
    spread and the call Credit spread you
  • 00:01:30
    can enter into these positions on great
  • 00:01:33
    stocks to make juicy premiums with
  • 00:01:35
    accounts as small as
  • 00:01:38
    ,000 and sometimes even with $500 you
  • 00:01:42
    can get into multiple positions you can
  • 00:01:45
    start trading credit spreads for as
  • 00:01:47
    little as $50 so I'm going to show you
  • 00:01:49
    how to enter credit spreads puts and
  • 00:01:52
    calls on different stocks for a regular
  • 00:01:54
    size account a smaller account which is
  • 00:01:57
    less than
  • 00:01:58
    $25,000 and a micro account which is
  • 00:02:01
    less than $5,000 even as little as $500
  • 00:02:04
    to $1,000 because you can enter credit
  • 00:02:07
    spread positions with as little as $50
  • 00:02:10
    collateral let me show you exactly how
  • 00:02:13
    powerful this strategy truly is I also
  • 00:02:17
    want you guys to understand that credit
  • 00:02:19
    spreads are slightly more risky than
  • 00:02:21
    selling regular options like puts and
  • 00:02:24
    calls and the reason for this is when
  • 00:02:25
    you sell a call option you typically
  • 00:02:28
    have the stock it's called a cover C
  • 00:02:30
    call or you have a leap option and
  • 00:02:32
    you're still selling covered calls if
  • 00:02:33
    you get assigned on a covered call you
  • 00:02:36
    can either a exercise your long deep in
  • 00:02:39
    the money call option which is a leaps
  • 00:02:41
    option or you can sell your shares and
  • 00:02:45
    just let yourself get assigned if you
  • 00:02:46
    indeed have the shares if you're selling
  • 00:02:48
    cash secured puts and you get assigned
  • 00:02:50
    well the money's already been set aside
  • 00:02:52
    hence the name cash secured they take
  • 00:02:54
    that money your brokerage does and you
  • 00:02:56
    buy the shares so there's no real risk
  • 00:02:58
    when you lose one of those trades trades
  • 00:03:00
    you end up selling your shares or you
  • 00:03:02
    end up buying shares that you already
  • 00:03:04
    wanted anyway even if the stock is down
  • 00:03:07
    you can just hold that stock until it
  • 00:03:08
    starts to go back up even if it takes
  • 00:03:10
    six months to a year so it makes it
  • 00:03:12
    fairly difficult to lose money in
  • 00:03:15
    reality because you can just keep
  • 00:03:16
    holding until you're in the profit So
  • 00:03:18
    eventually you're just trading time to
  • 00:03:20
    go from the red to the green so there's
  • 00:03:22
    no real risk because the money doesn't
  • 00:03:24
    just vanish you get the stock or you
  • 00:03:26
    sell your stock for money which is good
  • 00:03:29
    however when you are selling credit
  • 00:03:31
    spreads if you're wrong you have to take
  • 00:03:34
    the loss in a monetary value and I'm
  • 00:03:37
    going to show you exactly how to do this
  • 00:03:39
    because you want to trade your put
  • 00:03:41
    credit spreads a little bit safer than
  • 00:03:44
    you would regular cash geared puts and
  • 00:03:46
    the same with covered calls you want to
  • 00:03:47
    trade them safer at a lower Delta where
  • 00:03:50
    the real power with credit spreads comes
  • 00:03:52
    in is when you have a very strong
  • 00:03:54
    Confluence on the stock of where the
  • 00:03:57
    price is likely to go and what I mean by
  • 00:03:59
    conf influence is you have multiple
  • 00:04:01
    indicators and assurances that the stock
  • 00:04:03
    is going to move in the direction that
  • 00:04:04
    you believe it will for example it's out
  • 00:04:06
    of support the 10day is crossing over
  • 00:04:09
    the 20day and they're both crossing over
  • 00:04:10
    the 100 day and the averages are going
  • 00:04:12
    up and it's becoming overbought and the
  • 00:04:14
    stock is rising then you'd have pretty
  • 00:04:17
    good feeling and Confluence to sell a
  • 00:04:19
    put credit spread just below where the
  • 00:04:21
    stock is moving depending on where was
  • 00:04:24
    on the chart and vice versa if you see a
  • 00:04:26
    stock resisting hitting a ceiling and
  • 00:04:28
    it's starting to go down and all
  • 00:04:29
    indicators are pointing to the stock
  • 00:04:31
    going down then you could start selling
  • 00:04:34
    call Credit spreads above that price
  • 00:04:37
    that the stock is currently sitting at
  • 00:04:38
    this way you can make more juicy premium
  • 00:04:41
    let's Dive Right In let me show you guys
  • 00:04:43
    the chart how to time some put credit
  • 00:04:45
    spreads and how to time some call Credit
  • 00:04:47
    spreads and then we'll go to the options
  • 00:04:48
    chain and I'll show you how you can
  • 00:04:50
    execute this trade in a regular account
  • 00:04:53
    a small account and a micro account this
  • 00:04:55
    way no matter which account size you
  • 00:04:57
    have you will be able to get into these
  • 00:05:00
    trades and make juicy premiums
  • 00:05:02
    consistently to grow your account so
  • 00:05:04
    here we're looking at Tesla Tesla is a
  • 00:05:07
    great stock to make consistent juicy
  • 00:05:09
    premium every single week I make about5
  • 00:05:12
    to $10,000 a month selling put options
  • 00:05:15
    on Tesla but then again I have three
  • 00:05:17
    accounts one has over $500,000 and the
  • 00:05:20
    other one has over $3 million which
  • 00:05:21
    makes it very easy to do so but how do
  • 00:05:24
    you sell puts on a stock like Tesla if
  • 00:05:27
    you have an account size that's less
  • 00:05:29
    than than $100,000 in fact what if it's
  • 00:05:32
    less than $50,000 you could only sell
  • 00:05:34
    one cash secured put if your account is
  • 00:05:36
    less than
  • 00:05:38
    $50,000 however how would you trade this
  • 00:05:41
    stock by selling put options if you in
  • 00:05:43
    fact did have an account that was that
  • 00:05:44
    small what if you had an account that
  • 00:05:46
    was around 20 or
  • 00:05:48
    $25,000 what if you had a micro account
  • 00:05:50
    that was $5,000 even
  • 00:05:52
    $1,000 heck even $500 I'm going to show
  • 00:05:55
    you guys exactly what to do right now
  • 00:05:58
    first thing we we need to do is identify
  • 00:06:02
    big areas of interest near a resistance
  • 00:06:06
    and a support which is support and
  • 00:06:08
    resistance bottom and top supply and
  • 00:06:10
    demand bottom and top then we got to
  • 00:06:12
    find averages and figure out where the
  • 00:06:14
    stock is going to move the best way to
  • 00:06:17
    do this is to marry your stocks now I
  • 00:06:19
    don't mean fall in love with them and
  • 00:06:22
    hold on to them when you're losing money
  • 00:06:24
    and allow greed to take over and lose
  • 00:06:26
    money on trades that's not what I'm
  • 00:06:28
    talking about I mean get to know stocks
  • 00:06:31
    that you intend on trading this is the
  • 00:06:33
    majority of stocks that I trade there
  • 00:06:34
    are some other ones like Bank of America
  • 00:06:37
    and Ford Wells Fargo once in a while
  • 00:06:39
    Delta Apple American Airlines Amazon but
  • 00:06:41
    this is almost everything that I trade
  • 00:06:44
    and I really stick to stocks I know but
  • 00:06:47
    when it comes down to trading every week
  • 00:06:49
    Netflix Tesla micro strategy Apple
  • 00:06:53
    Walmart palen here Sofi that's it I keep
  • 00:06:56
    keep it to a handful and I understand
  • 00:06:59
    exactly where the stock is likely to go
  • 00:07:02
    and the moves that it's likely to make
  • 00:07:04
    when you understand a stock and you
  • 00:07:06
    trade it all the time you have a very
  • 00:07:08
    good feeling of where the stock is going
  • 00:07:10
    to go sometimes you will miss and the
  • 00:07:13
    stock will move way more than you
  • 00:07:15
    expected it to move or it will just move
  • 00:07:18
    consistently every single day in the
  • 00:07:20
    same direction which goes against pretty
  • 00:07:22
    much every move it's ever made in a
  • 00:07:24
    certain time frame which goes against
  • 00:07:27
    your analytics or the overall knowledge
  • 00:07:30
    that you've gained on that stock and
  • 00:07:32
    what I mean by this is if you are
  • 00:07:35
    watching a stock consistently every day
  • 00:07:37
    every week every month for several
  • 00:07:38
    months and you've realized an example
  • 00:07:40
    Tesla hasn't fallen below 420 for 3
  • 00:07:43
    months and it hasn't been above 450 then
  • 00:07:45
    you'd know that's the nice safe range
  • 00:07:47
    but there's going to be that time where
  • 00:07:49
    the stock will drop below 420 now it's
  • 00:07:51
    not going to happen all the time if you
  • 00:07:52
    get to know your stocks very well this
  • 00:07:54
    will be a very rare occurrence and as
  • 00:07:56
    long as you're good at managing your
  • 00:07:58
    trade and managing your loss and cutting
  • 00:08:01
    it quickly when you have enough
  • 00:08:02
    Confluence to understand it's going
  • 00:08:04
    against you to get into another winning
  • 00:08:06
    trade then your losses won't hurt you
  • 00:08:09
    very much at all let me show you exactly
  • 00:08:11
    what I'm talking about we can see here
  • 00:08:13
    there's a lot of data forget all these
  • 00:08:15
    lines here they're just my my put levels
  • 00:08:17
    where I sell my naked and cash secured
  • 00:08:19
    puts what we're going to pay attention
  • 00:08:21
    to right now is this black line going up
  • 00:08:24
    as well as this orange and blue line
  • 00:08:27
    that are following the stock the orange
  • 00:08:29
    orange is the 10day the blue is the
  • 00:08:31
    20-day and the black is the 100 day
  • 00:08:34
    these are overall price averages over a
  • 00:08:37
    window of time or duration of time
  • 00:08:39
    typically when you see something like
  • 00:08:41
    this on any stock where the 10day is
  • 00:08:44
    crossed below the 20 and they're working
  • 00:08:46
    their way in unison together on the way
  • 00:08:49
    down and then they in tandem cross below
  • 00:08:52
    the 100 day average like they've done
  • 00:08:54
    here you're considered to be in a
  • 00:08:56
    downtrend that's one Confluence that we
  • 00:08:59
    have that the stock is moving down now
  • 00:09:01
    we also have more Confluence which kind
  • 00:09:04
    of contradicts that the fact that the
  • 00:09:06
    stock is overs sold meaning it's likely
  • 00:09:09
    to return up in price which is why we're
  • 00:09:11
    seeing all of the selling pressure but
  • 00:09:13
    the stock is going nowhere so it's
  • 00:09:15
    hitting a support here so how do we
  • 00:09:19
    understand what's actually happening
  • 00:09:20
    here well what we're going to do is try
  • 00:09:22
    to look to the left to find out in
  • 00:09:25
    previous time over the last couple of
  • 00:09:27
    months weeks or even days where the
  • 00:09:29
    stock has resisted before and what a
  • 00:09:32
    resistance area is or a support level
  • 00:09:34
    like we see right here we go to the left
  • 00:09:36
    and look at all this support in here
  • 00:09:38
    when investors are buying the stock here
  • 00:09:41
    and sell it right here as soon as it
  • 00:09:43
    drops back down here again they got out
  • 00:09:46
    somewhere here or here and they missed
  • 00:09:48
    profits so they tell themselves like we
  • 00:09:50
    have done many times that we're going to
  • 00:09:52
    get back in when it gets here so every
  • 00:09:53
    time the stock drops the areas of
  • 00:09:55
    Interest right here and you can see
  • 00:09:57
    there is more right here right here here
  • 00:10:00
    here and a lot in here so this is a very
  • 00:10:04
    big area of Interest Big Time support so
  • 00:10:07
    the stock is bouncing off that do we
  • 00:10:09
    have enough Confluence that the stock is
  • 00:10:10
    not going to go below this level well
  • 00:10:13
    right now is New Year's time we're
  • 00:10:16
    couple of days from New Year's and
  • 00:10:18
    there's a lot of investors tax lost
  • 00:10:20
    harvesting so the rules don't quite
  • 00:10:22
    apply the same way during this time but
  • 00:10:25
    after New Year's maybe 2 weeks 3 weeks
  • 00:10:27
    into the new year then and these rules
  • 00:10:30
    pretty much apply the same but right now
  • 00:10:32
    things are a little iffy due to tax
  • 00:10:34
    season if you're watching this video
  • 00:10:36
    during tax season take that into account
  • 00:10:38
    if you're not watching it during tax
  • 00:10:39
    season then it's pretty much exactly
  • 00:10:41
    what I'm about to tell you which is the
  • 00:10:43
    support the stock moving below the 100
  • 00:10:46
    day the 10 is below the 20 they're in T
  • 00:10:48
    and moving below the 100 and it's
  • 00:10:49
    oversold so there is going to be a lot
  • 00:10:51
    of support it's likely the stock will
  • 00:10:53
    continue to drop somewhere down here
  • 00:10:55
    because we have a double Peak which is
  • 00:10:57
    another indicator the stock comes up
  • 00:10:59
    comes down comes back up comes down and
  • 00:11:02
    we're going to find some support here
  • 00:11:04
    and usually after a double test like
  • 00:11:06
    this the stock will break through this
  • 00:11:09
    support here and we'll find a previous
  • 00:11:11
    support which is over here and over here
  • 00:11:14
    so the stock is likely to fall maybe to
  • 00:11:16
    400 or 390 meaning a 390 is very safe on
  • 00:11:21
    the weekly you could sell 390s very very
  • 00:11:24
    safe on weekly so let's go take a look
  • 00:11:26
    at 390 on Tesla we're going to go out to
  • 00:11:29
    January 3rd and we are going to look at
  • 00:11:32
    the 390 we can see that 390 is 256 it's
  • 00:11:35
    a Delta of 12 which is extremely safe so
  • 00:11:40
    what we're going to do is we're going to
  • 00:11:41
    go even below that to 380 which is even
  • 00:11:44
    safer and what we're going to do is
  • 00:11:46
    we're going to execute a put credit
  • 00:11:49
    spread because we can't sell the put at
  • 00:11:51
    375 or 380 because that would take
  • 00:11:54
    $38,000 collateral what if you only have
  • 00:11:57
    a $50,000 account or $100,000 account
  • 00:12:00
    you wouldn't want to have 35% of your
  • 00:12:02
    account with just one put so let me show
  • 00:12:04
    you how to do this on a mediumsized
  • 00:12:06
    account then I'll show you on a small
  • 00:12:08
    and a micro we're going to click on sell
  • 00:12:11
    put which is the bid you click on bid on
  • 00:12:13
    any broker it's going to go to sell you
  • 00:12:15
    click on ask it's going to be buy so we
  • 00:12:17
    are going to sell a 380 and what we're
  • 00:12:21
    going to do is we are going to buy a
  • 00:12:25
    370 the reason why we're doing this is
  • 00:12:28
    because we are buying the long put in
  • 00:12:32
    order to hedge our position so that this
  • 00:12:35
    way we are covered if the stock drops
  • 00:12:38
    below 370 we don't lose
  • 00:12:42
    $38,000 the max we can lose is $1,000
  • 00:12:46
    because this is a $1,000 spread you
  • 00:12:49
    might be asking me Corey why would you
  • 00:12:51
    do a $1,000 spread instead of doing a
  • 00:12:54
    $500 spread or maybe a $300 spread let
  • 00:12:58
    me show you on a chart exactly why on an
  • 00:13:01
    account size of say 2030 $40,000 this
  • 00:13:04
    isn't recommended so here we are looking
  • 00:13:07
    at Tesla we're going to go to January
  • 00:13:09
    3rd and we're going to load up the same
  • 00:13:11
    strike prices that we just talked about
  • 00:13:14
    we are going to sell one buy the other
  • 00:13:16
    and these are both going to be put
  • 00:13:19
    options so we are going to sell the 380
  • 00:13:25
    put right here and we are going to buy
  • 00:13:28
    the 370
  • 00:13:32
    put you can see this is a put credit
  • 00:13:34
    spread just like we talked about 948 Max
  • 00:13:38
    loss Max profit $52 we go over to
  • 00:13:41
    Fidelity we can see $52 is exactly what
  • 00:13:43
    we're going to make let's go back to the
  • 00:13:46
    Chart now look at this ,000 spread okay
  • 00:13:51
    what if we change that to a $500 spread
  • 00:13:54
    let's go 375 let me show you the
  • 00:13:57
    difference here we would obvously make
  • 00:14:00
    less money we're only going to make $29
  • 00:14:02
    if the stock let's say Tesla drops to
  • 00:14:07
    37760 or 378 if the stock drops to 378
  • 00:14:12
    we lose
  • 00:14:13
    $171 if we go to the ,000 spread and
  • 00:14:16
    Tesla drops to $378 we lose $148
  • 00:14:21
    $23 less of a loss also Break Even is
  • 00:14:26
    37948 whereas the the $500 spread is no
  • 00:14:31
    longer $
  • 00:14:32
    37948 on the $500 spread it's no longer
  • 00:14:35
    $ 37948 it's
  • 00:14:38
    37971 so when you go to the ,000 spread
  • 00:14:41
    you have more of a buffer the stock has
  • 00:14:43
    to drop more in order to lose money and
  • 00:14:46
    you collect more premium upfront which
  • 00:14:48
    is why this is happening and if the
  • 00:14:50
    stock does drop you're protected because
  • 00:14:53
    now the stock has to keep dropping
  • 00:14:54
    further for you to lose the same amount
  • 00:14:56
    of money for example on a $500 spread if
  • 00:15:00
    the stock was to drop to
  • 00:15:02
    $379 you'd lose $51 on $1,000 spread if
  • 00:15:07
    the stock was to drop to$
  • 00:15:09
    379 you would lose $28 do you see the
  • 00:15:12
    difference so it's a lot better and what
  • 00:15:15
    we can do is we can go ahead and set up
  • 00:15:19
    a couple of these trades if you've got a
  • 00:15:21
    $30,000 account $220,000 account you
  • 00:15:24
    could sell three or four of these you
  • 00:15:25
    want to keep this to 5% of your
  • 00:15:27
    portfolio maybe 10% the most but I'd say
  • 00:15:29
    5% so what we're going to do here is if
  • 00:15:31
    you have a $50,000 account you could
  • 00:15:33
    sell 10 of these it's $10,000 you really
  • 00:15:36
    want to manage this risk so if you are
  • 00:15:39
    20% in the negative and it looks like
  • 00:15:41
    Tesla just keeps falling and falling and
  • 00:15:43
    there's no support and it keeps falling
  • 00:15:45
    you want to get out around 20 to 25%
  • 00:15:48
    wait for it to continue to drop once it
  • 00:15:50
    stabilizes then go below and sell more
  • 00:15:54
    another week out for example when the
  • 00:15:56
    stock starts moving against you let's
  • 00:15:59
    say you sell the 380 put credit spread
  • 00:16:01
    and the stock starts to drop a lot of
  • 00:16:02
    the time you'll see this number right
  • 00:16:04
    here where it starts getting really
  • 00:16:05
    close to your 380 midweek consolidates
  • 00:16:08
    drops a little bit below then starts to
  • 00:16:10
    go back up and then it expires
  • 00:16:11
    completely worthless and other times it
  • 00:16:14
    doesn't but most times if you pick the
  • 00:16:16
    right strike price outside of earnings
  • 00:16:18
    or majorly bad news events this won't
  • 00:16:22
    happen but when it does and you notice
  • 00:16:23
    it's a Tuesday or Wednesday or even a
  • 00:16:25
    Thursday or Friday whenever that may be
  • 00:16:27
    if it looks like the stock is getting
  • 00:16:29
    real close to Falling below your strike
  • 00:16:30
    price you can wait that out until it
  • 00:16:32
    looks like it starts falling below even
  • 00:16:34
    more then you can just get out wait for
  • 00:16:36
    the stock to drop and then once you've
  • 00:16:38
    see lots of consolidation and the stock
  • 00:16:40
    starting to move up you can go below to
  • 00:16:42
    another 10 to 15 Delta and resell more
  • 00:16:45
    put credit spreads to make back any
  • 00:16:47
    losses this is in those rare instances
  • 00:16:49
    where you'll be in a bad situation when
  • 00:16:52
    I say rare I trade put credit spreads
  • 00:16:54
    every single week on at least one or two
  • 00:16:56
    different stocks and in a 3mon window I
  • 00:16:59
    might lose on one or two of those trades
  • 00:17:02
    but every other trade I'm winning on so
  • 00:17:05
    it doesn't really matter so if I'm
  • 00:17:06
    trading two different stocks per week
  • 00:17:08
    over three months that's 12 weeks 12
  • 00:17:10
    separate times I've traded and only once
  • 00:17:12
    or twice I've had a problem and I get
  • 00:17:14
    out and maybe lose 20% but then all my
  • 00:17:16
    other trades are 100% so it just doesn't
  • 00:17:18
    really matter I have a success rate of
  • 00:17:20
    around 70 80% and my profits my pnl is
  • 00:17:23
    high so in one week I'll make $2 $3,000
  • 00:17:27
    and put and call Credit spread
  • 00:17:29
    and then if I do that for three straight
  • 00:17:30
    months and I only have one or two weeks
  • 00:17:32
    where I'm losing a grand or two then you
  • 00:17:34
    can see how this works it's $112,000
  • 00:17:38
    minus a few th000 in losses so still
  • 00:17:40
    over three months would be $8 to $10,000
  • 00:17:43
    it's still $3,000 a month for me and I
  • 00:17:45
    am trading very small amounts of credit
  • 00:17:49
    spreads whether it's put or call but you
  • 00:17:51
    can make a lot of money doing this so
  • 00:17:53
    you can sell about 10 of these it's
  • 00:17:55
    about $10,000 collateral which is okay
  • 00:17:58
    on a $50,000 or $60,000 account as long
  • 00:18:00
    as you manage it and you can get about
  • 00:18:02
    55 for each of these preview and this is
  • 00:18:06
    going to give you a profit of $550 a
  • 00:18:09
    week so you can make about $2,000 a
  • 00:18:11
    month quite easily only leveraging 10%
  • 00:18:14
    of your portfolio now what do you do if
  • 00:18:17
    you have a $10,000 account and you need
  • 00:18:20
    to get into this even cheaper well what
  • 00:18:22
    you can do is you can play this a little
  • 00:18:25
    bit safer and you can go with a 375
  • 00:18:29
    and then you can buy the 370 this will
  • 00:18:32
    give you about
  • 00:18:33
    $23 maybe 24 and if you were to sell 10
  • 00:18:37
    of these it would only be $5,000
  • 00:18:41
    collateral $5,000 on a $20,000 $225,000
  • 00:18:45
    account is not that big but you can sell
  • 00:18:48
    a little bit less of these go five and
  • 00:18:50
    if you sell five of them that's going to
  • 00:18:52
    be even safer because this is only
  • 00:18:54
    $2,500 and on a $20,000 account it's
  • 00:18:57
    less than 10% again very safe and you
  • 00:18:59
    can see here that you'll make a
  • 00:19:01
    consistent $120 a week just selling
  • 00:19:03
    these extremely out of the- money safe
  • 00:19:07
    put credit spreads on a small account of
  • 00:19:09
    say $10,000 or less we could sell a390
  • 00:19:13
    and buy a
  • 00:19:15
    38750 with
  • 00:19:17
    $250 we can trade Tesla so right here
  • 00:19:20
    you can see that I am going to sell the
  • 00:19:24
    390 and buy the 38750 I will make
  • 00:19:29
    $28 maybe even closer to $30 on just
  • 00:19:32
    $250 so if we do two of these we're only
  • 00:19:35
    putting up $500 collateral and this is
  • 00:19:37
    going to give us about $60 on $500
  • 00:19:40
    collateral this is 10% per week but if
  • 00:19:43
    you're asking me Corey what do I do on a
  • 00:19:45
    small account how do I generate juicy
  • 00:19:48
    premiums on an account that has less
  • 00:19:50
    than ,000 let me show you how we can do
  • 00:19:53
    that we're going to head over to Palin
  • 00:19:55
    here cuz this is a smaller stock and
  • 00:19:58
    we're going to find a really good spot
  • 00:20:00
    on paleng here we can see a lot of
  • 00:20:02
    support in the $78 range and a lot of
  • 00:20:06
    support down here in 76 and even more in
  • 00:20:09
    the 74 so we're going to do 74 or 76 so
  • 00:20:13
    we're going to do Palance here we're
  • 00:20:15
    going to go out to January 3rd of course
  • 00:20:17
    and we're going to do 76 we are going to
  • 00:20:20
    sell the $76 put and buy the
  • 00:20:25
    $75 put this is going to give us a
  • 00:20:28
    credit of $22 on the mid we could
  • 00:20:31
    probably get filled for 24 so this is
  • 00:20:34
    $24 and let's say we do two of these the
  • 00:20:37
    collateral required for these two puts
  • 00:20:41
    or put credit spreads is only going to
  • 00:20:44
    be 200 bucks a 100 each so on $200 we
  • 00:20:47
    can make 50 bucks a week just about this
  • 00:20:50
    is $200 a month on $200 collateral this
  • 00:20:54
    is double your money every single month
  • 00:20:58
    so if we we were going to do this let's
  • 00:20:59
    say on a $500 account we wanted to
  • 00:21:02
    really grow it aggressively what we
  • 00:21:04
    would do is we'd go a little bit lower
  • 00:21:06
    to the $74 put and we would sell that
  • 00:21:09
    one and what we would do is we would buy
  • 00:21:12
    the 73 $100 spread times 5 and then we
  • 00:21:17
    would try to get about 18 on this credit
  • 00:21:20
    spread and then we would see that our
  • 00:21:23
    total value would be $90 a week this is
  • 00:21:27
    $360 a month month on a $500 account
  • 00:21:30
    you're almost doubling your money every
  • 00:21:32
    single month 5 to 1,000 1,000 to 2,000
  • 00:21:36
    2,000 to 4,000 in 3 months you could go
  • 00:21:38
    from 500 to 4,000 I've been there done
  • 00:21:41
    that I have lots of students doing that
  • 00:21:43
    I have students that have went from
  • 00:21:45
    $88,000 to
  • 00:21:47
    $40,000 in less than five months other
  • 00:21:49
    students that have went from 30,000 to
  • 00:21:51
    $100,000 Plus in the same time frame and
  • 00:21:54
    then I also have students that have
  • 00:21:55
    $300,000 accounts that went to $800,000
  • 00:21:58
    in 5 months so this works and I teach it
  • 00:22:01
    to my students if you're having trouble
  • 00:22:02
    understanding anything that I'm
  • 00:22:04
    explaining in this video or if it seems
  • 00:22:05
    like it's Greek to you and you want to
  • 00:22:07
    retire or you want to make consistent
  • 00:22:09
    profits and you're struggling I would
  • 00:22:11
    love to help you it's what drives me
  • 00:22:13
    every single day guys can sign up at
  • 00:22:15
    anytime invest cory.com link is in the
  • 00:22:18
    information box below you can just click
  • 00:22:20
    on training once you get to the website
  • 00:22:22
    watch the video it'll answer any
  • 00:22:24
    questions you may have then you'll be
  • 00:22:25
    able to book a call with my team and I
  • 00:22:27
    this way I can help you get on track to
  • 00:22:29
    achieve your financial goals so we can
  • 00:22:32
    see that this is very powerful you can
  • 00:22:35
    make consistent safe premium on a stock
  • 00:22:39
    like Palin here but you can also trade a
  • 00:22:41
    stock like Sofi with just
  • 00:22:44
    $50 so if you have a $500 account and
  • 00:22:47
    you just want to make passive safe
  • 00:22:48
    consistent income on a very small
  • 00:22:51
    account we can go to Sofi and we could
  • 00:22:53
    trade and let's say set this up for a
  • 00:22:56
    $50 spread Sofi I would definitely look
  • 00:22:59
    at selling 15 because that's really safe
  • 00:23:02
    right now we're 14450 let's go with 15
  • 00:23:05
    we'll sell a 15 we'll buy
  • 00:23:07
    a450 and this will give us roughly $12
  • 00:23:12
    so for every $50 we put up we can make
  • 00:23:16
    $12 so let's say we want to put up
  • 00:23:19
    $500 we could go ahead and do 10 of
  • 00:23:22
    these $50 each time 10 and then we will
  • 00:23:26
    get about $12 on these credit spreads
  • 00:23:31
    and click preview
  • 00:23:33
    $120 will make only putting up $500
  • 00:23:37
    every two weeks so in a month we make
  • 00:23:40
    250 on 500 this is a 50% return on a
  • 00:23:44
    small stock but if you don't have $500
  • 00:23:48
    maybe you only have $300 you just lower
  • 00:23:50
    the amount but on a $500 account you
  • 00:23:53
    could sell 10 put credit spreads or 10
  • 00:23:56
    call Credit spreads on so Sofi if you
  • 00:23:59
    don't think Sofi is going to go up I
  • 00:24:01
    think it's having a little bit of
  • 00:24:02
    trouble breaking 1650 we could sell
  • 00:24:05
    a650 right here and buy a 17 and for
  • 00:24:09
    every $50 you put up you will make $18
  • 00:24:14
    put up 100 you make 36 this means you
  • 00:24:18
    can make $72 a month off of $100 so
  • 00:24:22
    again 50 to 75% return per month and
  • 00:24:25
    sometimes if you play a little more
  • 00:24:27
    aggressive like sing a 16 which I don't
  • 00:24:30
    recommend and buying a650 you can make
  • 00:24:33
    about 24 so for every $50 you put up is
  • 00:24:37
    24 in 2 weeks you do this for a month
  • 00:24:39
    you're doubling your money this would
  • 00:24:41
    legitimately be 100% return 2x return in
  • 00:24:44
    one month this is how you grow a small
  • 00:24:47
    account safely and efficiently you have
  • 00:24:51
    to understand where to enter on these
  • 00:24:54
    stocks for example on Sofi we can see a
  • 00:24:57
    double Peak 1 2 Sofi is unlikely to stay
  • 00:25:02
    above 1650 or 17 so by selling 1650 and
  • 00:25:06
    buying 17 it's very hard for the stock
  • 00:25:08
    to go above this and we're making
  • 00:25:10
    consistent passive income and this is
  • 00:25:13
    how you do it on a small account with
  • 00:25:16
    just $50 you can collect $18 a week on
  • 00:25:20
    $50 this is very good returns as long as
  • 00:25:24
    you understand the movement of the stock
  • 00:25:26
    when to get in when to get out out and
  • 00:25:28
    how to manage your losses this is
  • 00:25:31
    critical if it's starting to go against
  • 00:25:33
    you and you're starting to see a
  • 00:25:34
    negative and you think the Stock's going
  • 00:25:35
    to keep dropping get out a very small
  • 00:25:37
    loss don't let the losses go
  • 00:25:40
    exponentially against you but worst case
  • 00:25:43
    you'd only be losing $50 on a $50 credit
  • 00:25:46
    spread and with a $100 credit spread you
  • 00:25:48
    could lose $100 on a $1,000 credit
  • 00:25:50
    spread you have to manage those even
  • 00:25:52
    more but it's harder for the stock to go
  • 00:25:55
    against you in a $1,000 credit spread
  • 00:25:58
    one more example to show you let's say
  • 00:26:00
    that we think that we're going to go
  • 00:26:02
    look at say balance here and we don't
  • 00:26:05
    think the stock is going to go much
  • 00:26:07
    higher it resisted 8250 and it's
  • 00:26:09
    resisted 8480 so we think 85 or 86 is
  • 00:26:13
    very safe we could actually go up to
  • 00:26:16
    87 and go out two weeks or three weeks
  • 00:26:20
    so let's look at Palin here and we're
  • 00:26:22
    going to look at calls and we're going
  • 00:26:24
    to look at 87 and if we go out two weeks
  • 00:26:27
    we can see 87 is $113 we could sell this
  • 00:26:31
    buy the
  • 00:26:33
    88 which is strange it's only giving us
  • 00:26:35
    $15 it's because it's after hours so
  • 00:26:38
    what we're going to do is we're going to
  • 00:26:39
    sell the
  • 00:26:41
    87 and buy the 90 so realistically the
  • 00:26:45
    87 and the 88 is going to give you about
  • 00:26:47
    the same as this because you figure the
  • 00:26:49
    87 is about 115 you'll get filled for
  • 00:26:53
    and you can buy the 88 for probably 95
  • 00:26:55
    so about 20 to 25 on that spread spr um
  • 00:26:59
    but we could do a $200 spread like this
  • 00:27:01
    or we can go ahead and just do the 87
  • 00:27:03
    and buy the 88 and probably get filled
  • 00:27:07
    right around $20 okay so on a $100
  • 00:27:10
    spread we make 20 bucks which is $40 a
  • 00:27:13
    month 40 50% on average so if we want to
  • 00:27:16
    sell five of these we're just going to
  • 00:27:17
    put up $500 and we'll just get filled
  • 00:27:20
    maybe even close to the midpoint you can
  • 00:27:24
    see on 500 bucks we stand to make $80 so
  • 00:27:26
    we'll make $160 a month which is just
  • 00:27:29
    shy of 50% return like 35 40% very safe
  • 00:27:33
    because we know that paler is highly
  • 00:27:35
    unlikely to go to 88 if we wanted to run
  • 00:27:37
    this strategy a little more aggressive
  • 00:27:38
    palen had a lot of trouble breaking 8485
  • 00:27:42
    we could very easily just go ahead and
  • 00:27:45
    sell an 84 or 85 do an 84 buy an 85 we
  • 00:27:50
    would make closer to 25 or $30 and if we
  • 00:27:53
    sold five of those then our midpoint
  • 00:27:56
    let's say would be 30 we're just putting
  • 00:27:57
    up $500 a collateral and we're able to
  • 00:28:00
    make $150 so in a month we're looking at
  • 00:28:03
    300 on 500 which is about 60% 65% which
  • 00:28:07
    is really good because you're making all
  • 00:28:10
    these trades with a $500 account or
  • 00:28:12
    $1,000 account on $1,000 account I
  • 00:28:14
    recommend running multiple $50 positions
  • 00:28:17
    and multiple $100 spreads on different
  • 00:28:21
    stocks on a $5,000 account the same
  • 00:28:24
    thing but you can run a few extra so if
  • 00:28:26
    you have a $1,000 account then you can
  • 00:28:29
    run four $50 spreads on one stock and
  • 00:28:32
    one credit spread whether it be call or
  • 00:28:35
    put on other different stocks if you
  • 00:28:37
    have a $5,000 account well then you
  • 00:28:39
    could sell $150 spreads on one stock
  • 00:28:42
    because it's only $500 on a $10,000
  • 00:28:44
    account so you could sell 10 maybe even
  • 00:28:46
    15 spreads on you know Sofi or
  • 00:28:49
    SoundHound but you have to really manage
  • 00:28:52
    these trades and you have to really
  • 00:28:54
    understand that when the stock starts
  • 00:28:55
    going against you if you're very
  • 00:28:57
    confident is going to keep going against
  • 00:28:59
    you get out wait for the stock to settle
  • 00:29:01
    down then re-enter further away from the
  • 00:29:03
    strike price whether that would be down
  • 00:29:05
    or up or just go to another stock that
  • 00:29:07
    you're more comfortable with that is
  • 00:29:08
    moving in the direction you expect it to
  • 00:29:11
    which is why I say understand your
  • 00:29:12
    stocks study the charts and watch these
  • 00:29:15
    stocks every day consistently for weeks
  • 00:29:17
    on end to understand the likelihood and
  • 00:29:20
    the direction and the amount these
  • 00:29:22
    stocks move on a daily basis on average
  • 00:29:25
    outside of major earnings or new
  • 00:29:28
    Catalyst this will help you greatly
  • 00:29:31
    understanding where the risks are and
  • 00:29:32
    how to make more money and to know where
  • 00:29:35
    and when to get in and out of these
  • 00:29:37
    trades like I said this can be very
  • 00:29:40
    confusing I understand that credit
  • 00:29:42
    spreads can be a little bit tricky but
  • 00:29:44
    I've tried to show you guys the easy way
  • 00:29:46
    to execute call and put credit spreads
  • 00:29:48
    and how to time it out understanding
  • 00:29:50
    Confluence and how to understand stock
  • 00:29:53
    movements to make better trades but if
  • 00:29:55
    it still seems confusing to you you guys
  • 00:29:57
    can sign up for my masterclass boot camp
  • 00:30:01
    coaching training course and Discord at
  • 00:30:03
    anytime invest.com the links in the
  • 00:30:06
    information box below you guys just want
  • 00:30:08
    to click on training when you get to the
  • 00:30:09
    website watch the video it'll answer all
  • 00:30:11
    the questions you may have then you'll
  • 00:30:12
    be able to book a call with my team and
  • 00:30:14
    I this way I can help you achieve your
  • 00:30:16
    financial goals just like I have for all
  • 00:30:18
    of my other students I look forward to
  • 00:30:20
    speaking with you and seeing you real
  • 00:30:22
    soon take care of yourselves
Etiquetas
  • credit spreads
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  • small accounts
  • premium earning
  • risk management
  • stock trading
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