Secrets option strategy calendar spread trading
Click Here to Embiggen…. Now, normally taking a. Doing this spread, or any spread trade normally involves capital risk… but the way this play was structured there was no way Mike was gonna lose anything as a result of this play. Again, not shabby at all. Sounds too good to be true… so I guess it makes sense to show the black-and-white numbers on that. I used to work in an emergency room.
But what if this play was done in the context of owning the underlying stock? Because I know what you are thinking: But owning the stock in the first place sure had some risk to it! Because Mike had in place another play that limited his risk down to 6. Mike still happens to own CAR. But by using the RadioActive Trading Income Methods he has now erased all his risk of ownership, clear out to January of We call this phenomenon Bulletproofing.
You just read how to do one type of Riskless Spread trade…but here at RadioActive Trading there are many more ways to apply riskless spread trades in the proper context! Can you think of another Trader that might enjoy this article? Share or Subscribe now. Then, using the ratio call spread he captured. I think this article is a bit misleading. Actually this is not a ratio call spread, it is rather a combination of a covered call with a bull call spread. Neat but not really kosher.
Do you have any unconventional spreads that do not oblige one to buy stock? Now, is there risk to owning the stock?
Of course there is. That took care of all but 6. If Mike wants to do another ratio call spread, HE MAY without any fear of losing capital because he has the stock on hand… and if his stock goes down, he can no longer be hurt by that either. Thanks for the input. But what do we call that? A trade that itself is also now riskless. He is Bulletproof and can continue doing nested ratio call spreads or any other RadioActive Trading technique to milk this sucker for more premium.
There is no mention of if the stock falls PAST the premium gained by the net of two naked calls — one long call. After that, this trade is suicide if the stock falls.
And, in this market, this is truly a suicide trade. He had a bull call spread and a covered call as well as a put, it was risk free as I have personally done this exact play many times myself. Johnyoga has a valid point, but no follow up.
This causes a loss of credibility to the OP. There is no reason not to admit that, yes, there is that possibility of a downside fast move that would wipe out the premiums collected and put the whole plan into a loss position. Just be honest about the whole risk picture and people will be better equipped to deal with it. Leaving out critical pieces simply makes the OP look like a salesman instead of a trusted guru.
Show me yours maybe? Sell a next month naked put way otm for up front premium. Can also do 2 months ahead. Best to buy big on dips Daily Chart carefully on Monthly highs. I like you, and I want to buy whatever your selling.
Just shoot me the link. These methods are great. I love your stuff. I am kinda an options newbie but i would love to learn from you ALL you know abt options and bulletproofing.
Well to learn all I know you will want to pick up The Blueprint. Hi Kurt, this is jnsegal. I am hoping you can help me out. I simultaneously STO 07 65k call and pocketed the credit. Since then I changed brokers to OptionsHouse. I contact them and they tell me I need a level 6 and I only have a level 3 and not enough in my account for this transaction. So you gotta go on the open market and buy stock high, only to sell it low. Short calls are risky, right?
Emil thought I was making a bet with him that it was gonna be heads or tails. And I did, accurately. When the context of your short call includes ownership of the stock… then the risk inherent in the short call goes away. Hence, you have probably already done a riskless options play.
In the above example of a short call, we saw that doing the call itself.. BY itself… was risky. But in the context that includes owning stock at a lower cost basis, that spread has no risk. All four legs combined: You cannot lose on the bear call spread without winning bigger on the stock!
The Bear Call Spread cannot go against. You get to keep the credit suplied, whether the stock goes up, down, or sideways. But if we do own the stock… That risk goes away. In the context of owning stock, there is no risk to doing a Bear Call Spread if the strike price of the short call is higher than the cost basis for the stock.
Here is the strange secret behind doing Riskless Spread Trades: Bonus karma points for you for sharing and commenting! I have seen you used the same sentence in IM I have seen some of your videos where the short bear call strike is below the protective put…so, does this sentence mean that you are not taking any risk if the premium received from call is enough to cancel the total risk left in the Married Put and you are not expecting any direction outcome from the stock?
Please post cost basis example if possible. If an IM 6 is used where the short call is below the cost basis, you may end up in a situation where you have two ways to lose. Once again, the questions come in from investors being introduced to RadioActive Trading about trade entry. We run comparisons every few months based on customer feedback and new trading ideas […]. Each position is a little different. You owe it to yourself to understand […]. Who should learn the RadioActive Trading methods?
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