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How to Make Money Trading Options - The Vertical Spread

7734 ratings | 559934 views
www.SkyViewTrading.com The Short Vertical Spread (aka Vertical Credit Spread) is the most basic options trading spread. A Short Vertical Call Spread is a bearish/neutral strategy that consists of a Short Call and a Long Call… And a Vertical Put Spread is a bullish/neutral strategy that consists of a Short Put and Long Put. Use this option spreads strategy to sell option time premium with very little risk and capital. Quit letting time decay ruin your trades and start letting it work in your favor. You can trade this strategy with an account size of just 2k while allocating very little capital to each trade. Watch this video to fully understand how this strategy works and how to trade it. Also, make sure to sign up for our FREE 3 Video Lesson Series at www.skyviewtrading.com! Adam Thomas Sky View Trading option spreads strategies option strategies Vertical Spread Option Strategy Vertical Credit Spread Iron Condor How To Trade a Vertical Spread option trading basics option time decay consistent options income
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Text Comments (486)
cj Martin (9 days ago)
Helpful! Thank you two years later. LOL,.
beastydude123 (11 days ago)
Can I create a closing order for a better profit on my bullish vertical call spread? I'd get a 1230 credit versus 750 from difference of strk price minus prem
Melvin Espinal (14 days ago)
Video seemed to do a good job explaining vertical spreads so i am left wondering why there are so many dislikes on the video.lol. Did I miss something?
mehrshadvr4 (27 days ago)
You did not explain buying vertical.
OMNIEQ Financial (1 month ago)
If you're looking for vertical credit spread trade ideas, we have a real-time scanner: omnieq. com
Jennifer Gonzalez (1 month ago)
how did he get a loss of 2700 and gain of 2380?
Cube930 (1 month ago)
30.00 out of the money times 100 = $3000 Entry is 3.00 times 100 = $300 3000-300 is $2700 loss 25 in the money times 100 = $2500 Entry is 1.20 times 100 = $120 $2500-$120 = $2380. You use 100 shares with each option so thats why it multiplies by 100
zapphodd Bubbahbrox (1 month ago)
anyone who speaks this fast and does not give a purely mathematical explanation.. Also, he should be a billionaire. What was he selling.. some widget.
zapphodd Bubbahbrox (1 month ago)
are all the comments bots. I mean. really
gnatman1102 (1 month ago)
Great explanation. However, with my horrible options trading luck, that 1% chance of a stock going above the break-even price of the trade would be 99% chance for me.
Issa Latar (1 month ago)
if your option expires worthless how do you get 300?
zapphodd Bubbahbrox (1 month ago)
You don't. You cover your loss on the other side. This way, you become poor incrementally.
Issa Latar (1 month ago)
how do you profit if your call stays out of the money? like in your netflix example...wtf
zapphodd Bubbahbrox (1 month ago)
Read the fine print. You loose.. That is ok thought, since you rinse and repeat. Just like SHAMpoo.
aivilOmI (1 month ago)
I am confused at the 5:40 mark. I thought with short calls, you want the stock price to be lower than the strike price? I thought both the buy and sell are OTM in this scenerio?
Which platform do u use???
Dave (1 month ago)
Thinkorswim he said.. part of TD Ameritrade I believe
Juliet Johnson (1 month ago)
never believe i could keep on making such profit each time i invest with the help of mr robert walker. his strategy works like that of kings. contact him at [email protected]
Juliet Johnson (1 month ago)
+Kelly Woodson do you know him too??
Juliet Johnson (1 month ago)
+Kelly Woodson oh, yes! i see i am not the only one that knows him.?
Kelvin Richard (1 month ago)
@Maria Washington i agree with you, mr robert walker is the way forward??
Kelly Woodson (1 month ago)
are you talking about mr robert walker, i mean the trader ???? +Juliet Johnson
Juliet Johnson (1 month ago)
i invested with Mr robert walker and i got back a huge profit . he is simply the best i have come across so far .?? +Kelly Woodson
Rahul Gusain (1 month ago)
I am literally so much confused ,need a friend who could explain the basic btw great video
Ashley Janit (19 days ago)
there are no such things as coaches and mentors in this business and they sure as hell don't just trade for you. stay away from these scammers.
zapphodd Bubbahbrox (1 month ago)
+Fredrick Schmid I contacted an random guy named Trevor, but he was out to lunch.. I mean, for the duration. I can loose money faster than anyone if you need my contact info
Fredrick Schmid (1 month ago)
+Chloe Brendan Oh I see someone else has met him! I contacted Trevor a few weeks ago through a friend on "Babypips". Best financial decision I ever made. Since then, I have also made tremendous progress in my trading. Though I am still a novice. LOL
Chloe Brendan (1 month ago)
hello @Rahul Gusain, I'm not sure how far you've gone since you posted this comment. I found a coach, who currently trades for me, and mentors me. For beginners like me, I'm convinced the best way to improve your trading skills is to learn from a coach. if you're interested, you can talk to my coach - Trevor. I'm sure he'll be glad to help out. Whatsapp: +1 (646) 585-7863
Raj Reddy (1 month ago)
at 4.05 min example ur wrong, 100 calls made 25 dollar profit, meaning should be 2380 - 300 = 2080 profit not a loss.
EPTRotorsports (1 month ago)
Only problem with covering your call with a call, is that you have to keep your call until the last second. Lets so the stock is at 78 on the Friday the call you sold expires. You option has a strike of 70. You are afraid its going to drop to 74 by market close. So you sell your call for its market value so you dont have to exercise it and by $7800 worth of stock. Then it Jumps and closes at $83 i which most brokers automatically exercise in the money options. Now you dont have a call to cover your call. So instead of you call covering the purchase of the shares you are now on the hook for shares at $8300. You get to sell them for 8000 so its not that bad, but you better have the capital or margin to buy them.
Andrey Morris (2 months ago)
I must recommend Mr Frank Robert stocks forex, Iq/binary option strategy to my fellow traders,though i have lost a lot before i met him but the good news is that i'm earning mightily using his strategy for months now, my aim is to make everyone trading forex, iq/binary option to gain from his strategy, much appreciation to him, i'm succeeding via his strategy and the best signal software he directed me to, indeed Frank you are the best and may you continue flying higher for being a great helper to every one that comes to you. Just contact him freely via email: [email protected]
Andrey Morris (2 months ago)
Just contact him freely via email: [email protected]
Stephen Heymann (2 months ago)
this was not helpful at ALL.
bike Life (2 months ago)
Idk if everyone understood but great information man i thought i needed a massive account to do this but i guess is just the naked call and puts
Leong Kah Loon (2 months ago)
what platform is it?
Javier Flores (2 months ago)
Think or swim
Pogmo Thoin (2 months ago)
I wish someone would demonstrate how to place these trades using the ThinkorSwim mobile app because I can't figure out how to select the individual strikes I want. The app chooses them for you and they are always 1-strike different in prices. You also do not get all that pre-populated info about the trade that you mention near the end of this video.
Scott Holmes (1 month ago)
Try different stadiges on paper on TOS
Big Luna (2 months ago)
How do you close the option to take profits? If I bought a call I sell it? And if I bought a call what does it mean to exercise my call?
andrew newman (2 months ago)
nothing beats trading with a profitable strategy, i keep on winning with mr stephan Briggs handling my trades
zapphodd Bubbahbrox (1 month ago)
+andrew newman he is also on the dawk webz
zapphodd Bubbahbrox (1 month ago)
+andrew newman That is unbelievable.. In fact, I don't believe it at all.
Big Kahuna (1 month ago)
+andrew newman ok the email wouldn't go thru.
andrew newman (1 month ago)
+Big Kahuna He has other modes of contact. Email is the most convenient for me.
Big Kahuna (1 month ago)
+andrew newman only thru email sounds fishy
Alex (2 months ago)
Wonderfully made video. Super clear and straightforward. Fantastic for visual learners and I really appreciated the Think or Swim examples. Just some really great shit my dude.
Chris Kline (2 months ago)
Apparently i'm dumb. That's what i learned
zapphodd Bubbahbrox (1 month ago)
The fact that you think that proves you are intelligent. Pay no attention to the man behind the curtain. You cannot beat the AI. Invest in the indexes and sleep at night.
Suman Rauf (1 month ago)
Me too lol
Alex (2 months ago)
Chris Kline Nah man. The fact that you’re watching this at all proves the opposite.
johnsanabria17 (2 months ago)
How can you start your trade with selling the 100 call @ 3.00? dont you need to own it first to be able to sell it? sorry if its a dumb question
Stephen (2 months ago)
It is a lot easier if you go to Wharton or Stanford MBA in Finance.
zapphodd Bubbahbrox (1 month ago)
@Stephen.. now we're talkin.
Jim Gatti (2 months ago)
simple just sell puts on good companies that make MONEY and turn a profit each quarter and try to acquire them cheaper
Liu Zhihao (3 months ago)
Is it call or puts?
Bin Jie Mai (3 months ago)
is this the same as bull debit call spread? if not, when do we use them?
rosalia muñoz (3 months ago)
Winner of a video, I've been looking for "butterfly option strategy adjustment" for a while now, and I think this has helped. Have you ever come across - Winoorfa Option Olegroson - (just google it ) ? Ive heard some incredible things about it and my co-worker got cool success with it.
Matt Krcma (3 months ago)
Why don't you sell a 100 call and then buy a 100 call? Or buy a 95 call? (Assuming the underlying stock is trading at 93). Then you could lose even less money right? Would this limit profits?
Wolfgang Icarus (3 months ago)
4:05 shouldn't selling 100 call at 3 give you 300 ? why is it 30?
Raj Reddy (1 month ago)
you r right, infact 100 calls made almost made 2380 dollars vs loss 300, should be 2380-300= 2080 plus n profit.
Rpsamy Indhra (3 months ago)
Nice video.. got the required information completely. Thanks
robert wade (3 months ago)
What heppends if i have 2 both ITO calls
MinDetonator96 (4 months ago)
i dont think the kind of people who watch these videos have even 1% of the necessary capital required to sell calls and puts of expensive stocks
Arma Budi (3 months ago)
To me, Forex trading is a business and You’re the business owner. If you don’t treat it as such, the bad days will ruin you. If a shop owner neglected his store and just expected customers to pour in and purchase goods, then the business is going to fail. It’s no different when a Forex trader thinks they will magically succeed when they start trading without some sort of trading plan or money management model. These traders are kidding themselves and wash out very quickly. if you want to learn how trading works in depth, i advice you learn Blended model strategy and study how to apply these method by Dmirty Vladislav.
MusicIsSoMuchFun Piano (4 months ago)
Sooooo If the stock doesn't move up much on a short or vice Versa when it's out of the money, we made money? But only if it made it to the end of the expiration date we can collect the funds when it's rendered worthless ? Interesting
suma shean (4 months ago)
Eric Henry (4 months ago)
Bear market options
DIY GUY (4 months ago)
Options - Choices - Options - Choices
matt napper (4 months ago)
my poor little head is spinning, so much to learn
eugyero (4 months ago)
This year 2019 I shall try options and make millions or something like that. The best options explanation by far.
robert wade (4 months ago)
So is there a way to have a higher max profit and lower max loss? Or that is not a thing in stock strategy.
fx ea (4 months ago)
flydye45 (4 months ago)
Every time you go to that stock trading platform, you just 'click click click' very very quickly so it is very hard to absorb. "Let me right click, show it to you for 1 second, spout a line, and go to another part of the platform without giving you a chance to see and absorb.' I would suggest slowing WAY down on that part
zapphodd Bubbahbrox (1 month ago)
He cannot sell you by slowing down and making sense. There is a clue there somewhere. And, why does he bother.. In 2 years he'd be a billionaire.
Juan de Dios Ortiz (4 months ago)
Koji seat (4 months ago)
God Bless. Perfect
zapphodd Bubbahbrox (1 month ago)
God Bless 'Merica. This man is BGEZZZUZ.
Andrea Pastina (4 months ago)
Very nice explaination. Can you make a video on short box strategy?
zapphodd Bubbahbrox (1 month ago)
He just showed you the short-bus strategy.
GunP01nT510 (4 months ago)
I’ve been trading for a while but my first trade f*cked me. I made new rules for vertical spreads and they’ve been working fantastically! https://www.reddit.com/r/options/comments/a8ljfj/my_googl_995_put_spread_expired_atm_and_now_i/?st=JPZLWFBT&sh=07aeecd3
Hina Hussain (5 months ago)
thank you nice job
Ivan Sweeney (5 months ago)
Yue Chen (5 months ago)
Seems great strategies. What is the real risk?
zapphodd Bubbahbrox (1 month ago)
All of your money.
Retired MGTOW (5 months ago)
Peter Hass (5 months ago)
How does selling a call work? Is it like shorting a stock and why wouldn't I buy a put instead?
Chuckey 2015 (5 months ago)
How would this work with Robinhood?
Nebderf 350zHR (6 months ago)
The only confusion im having is, are you using tje example if we BUY a vertical spread? Or SELL a vertical spread? And are we buying or selling the put or buy side? I use ToS so on TOS it gives you the option for vertical spread to buy or sell the put or call of the strike for the spread.. How does this work if im betting the stock doesnt go up? Buy the Put??
Hash Money (6 months ago)
It's not called Vertical Spread. It's called Credit Call Spread (Bear Call Spread). His videos are trying to confuse people. I recommend to watch a different channel!
Johnson kelly (6 months ago)
I started trading binary with hope as light as air but never made profit, I always run at loss but now Dr. Willson has changed my perception about binary, my coming in contact with him has yielded positive results. I have been able to recover all my losses with the application of his strategy. I now earn $20000 USD to $30000 USD every week, Kudos to Dr. Willson. Traders who intend to succeed should contact him with his Email: [email protected]
Wesley Groth (6 months ago)
Learning to be a bear.
monica brown (6 months ago)
txt for 💸 💸 💸 530 404-0768
Cris Conson (6 months ago)
I'm still trying to figure it out hows this vertical spread work, I watched this video over and over again and the same other video.. Made my brain little hurt.
Scott Holmes (1 month ago)
Experiment on paper
Hua Ye (6 months ago)
@3:18, but one needs to have 100 stocks to sell the call, so the overall value of the gain needs to include the 100 stock itself ?
Scott Holmes (1 month ago)
That is a covered call
Wilfredo Manglapus, Jr. (6 months ago)
In the example you used, what if the stock price skyrocketed? Then we would make a profit since the 105 call would be a lot more expensive now, right? great video btw
jhh764 (4 days ago)
No he explained that in the video. Your main bet was for the stock to stay under 100 and anything above your long strike of 105 in this case is a loss. I think lol
megyn Kelly1 (6 months ago)
Please put a Link so people can find Where to find the CALL & PUT tradings!
megyn Kelly1 (6 months ago)
Pleease put a link in each of your Call and Put video! A link to the Call and Put trading! Not those normal tradings like Binance , Coinbase, Bitfinex, and things like that. I can't do those.
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linkmaster118 (7 months ago)
But how do you sell an option you don't own? Is he talking about a put? So you buy a 70 put and an 80 call?
Fashion on budget (7 months ago)
I understand this strategy, can I know what's the trading software you are using here?
Sky View Trading (7 months ago)
Dudorov Oleg (7 months ago)
Thank you sir
Martin Owen (7 months ago)
you all need to messenger this account manager he has very good strategies, that bring amazing profits
Mike T (8 months ago)
Am I the only one lost how this guy comes up with these numbers?
HD كاس العالم (8 months ago)
Honestly I’m still confused. I feel like I need to make a vertical spread manually even if I lost, I just wanna see how it really works with my current brokerage
Huguette Berthalon (6 months ago)
I got a positive feedback today on my trading account after i bought a copy of the learning material called the Blended Model Strategy by Dmitry vladislav, and completely changed my trading for a better. I really enjoy this content, Very informative and fun to work with on ITM Options.
djonthn (8 months ago)
I don't get the 3rd example, someone please explain it better. If the price at expiration is at $101: the buy 105 call is worthless, you still have to cover the sell call (assuming you bought an uncovered call) since it's ITM. Your loss would be the cost of covering the sell call plus the premium paid for the buy call: 100 x 101 + 120 = 10,220
Shirley A. Wine (8 months ago)
At the early stage of my trading experience, i lost a lot to scammers and fake managers and it was so bad for me financially until i saw posts about Mr Frank Robert who managed my account with his strategy and i am so glad i have been able to recover all that i lost since i started trading with his strategy,Thanks to Mr Frank Robert who made it up to me.
Shirley A. Wine (8 months ago)
One can contact him for help & strategy via: [email protected]
Piyush Chauhan (8 months ago)
Make a vedio on bull call , how to understand the breakeven of that statergy . Thanks for hard work
Brunno Póvoa (8 months ago)
Please could you tell me, the software name that you use to produce the videos?
Piyush Chauhan (8 months ago)
Hi thanks for vedio , but how it is different from iron Condor statrgy
Kc F (8 months ago)
How are you selling an option unless you already own one? Buying another option at a different stock price while simultaneously selling one at another strike price doesn’t compute for me.
360 Degrees productions (5 months ago)
It's called going short.. You sell first and buy later
Glauber Brito (8 months ago)
Great video. Thanks.
Amish Trivedi (8 months ago)
Options are difficult to understand.
Huguette Berthalon (6 months ago)
I got a positive feedback today on my trading account after i bought a copy of the learning material called the Blended Model Strategy by Dmitry vladislav, and completely changed my trading for a better. I really enjoy this content, Very informative and fun to work with on ITM Options.
Vladimir Putin (9 months ago)
thanks a lot
Israela Maccabee (9 months ago)
I'm a novice. I'd like to see a video in which it's taught how to set up an account, and how to test one trade without much risk. Even if I make $1, as long as I understand the concept, I'd be on the right track. This is a video for advanced traders.
zapphodd Bubbahbrox (1 month ago)
+Dennis Manzardo Jr This is actually sound.. But use that as a filter, then use Robinhood to trade at lower fees or for free. Just an opinion but ... reality is real.
Stephen (2 months ago)
+Dennis Manzardo Jr And they have an education platform,
Dennis Manzardo Jr (3 months ago)
If you open a TD Ameritrade account you can get on the Think or Swim platform and choose what they call "paper trading" that allows you to enter practice trades in real time to see how they work out without risking any real money.
Sky View Trading (7 months ago)
Check out our website. We teach all of this. :)
bestoptionsvid thx
Judean Derby (9 months ago)
If I don't have permission to do credit spreads on Robinhood, can I buy/sell the calls/puts separately to create a credit spread anyway?
Quincy Birwood (9 months ago)
This is not completely true. What this video talks about is trading an index which is cash adjusted. If when selling a call spread on a stock and the price of the stock closes at expiration inside your spread (above the sold strike and below your protection), you have sold the stock at that strike price. The option then converts to stock and you are short the stock at that strike price. The cash for the sold stock goes into your account and the short shares are listed on your position statement. This can cause some heart palpitations the next market day when you have to clear the short stock. The real trouble begins if the stock price rockets higher if you don't have the cash to cover the difference from the price where you sold it. If you have any doubts, ask your broker what would happen in this scenario with a sold stock option closing in the money.
PunkJabi (9 months ago)
I am from the future. Netflix stock will go to 422 and then dump to 350 after earning. So you are good buying here.
thewerdo123 (1 month ago)
PunkJabi hahahahhahaha lmao
Ben Karden (10 months ago)
The Best
khup lian (10 months ago)
do you have any broker you recommend?
KC T (10 months ago)
You are simply brilliant
Kenneth Ma (10 months ago)
"Very small chance." Today Jun 25 2018 NFLX at 384
rotagbhd (4 months ago)
It was relative to the length of the contract.
Ray Huertas (10 months ago)
Which are the best trading platforms out there?
Naveen Manohar (11 months ago)
New trader still learning here. Thank you for the simple-to-understand videos. However, I have a question. It would be great if anyone can help me out here: In scenario 1, since the stock did not rise above the strike price, wouldn't both options technically be in the money?
Naveen Manohar (10 months ago)
In case anyone has the same doubt: For call options, they are ITM as long as the current market price (CMP) is greater than the strike price. In scenario 1, CMP is < 100; therefore, the call options of strike price of 100 would be OTM. While buying the call option would result in a loss, selling the same would have resulted in a profit.
Bice Delbosque (11 months ago)
*FIRST MILLION ROAD* always provide me right time signal to buy or sell
الف شكر لك أستاذ تحية وسلام من الجزائر
six6strings (11 months ago)
So what happens if the stock goes above the sell call strike price and the buyer wants to exercise their option? Should we assume we already have 100 shares to sell on our portfolio?
Mitch Zimmer (11 months ago)
great video. Crazy to think that NFLX went from 93 to 350 in two years...
Melanie Nguyen (11 months ago)
okay so on rh the med break wven is 152.55. and since I buy, I expect the price to go up. If my MED is go up more than 152.55 mean Im going to have more profit right?
Ramen Vermicelli (11 months ago)
Great videos for visual learners! You break down a complex process and make it understandable. Thank you!
zapphodd Bubbahbrox (1 month ago)
Buy my new book - " how visual learning drove me to live in a van down by the river"
András Erős-Fodor (11 months ago)
Netflix gone nuts

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