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How to Make Money Trading Options - The Vertical Spread

7207 ratings | 530981 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 (456)
Rahul Gusain (22 hours ago)
I am literally so much confused ,need a friend who could explain the basic btw great video
Raj Reddy (1 day 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 (4 days 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 (4 days 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 (4 days ago)
Just contact him freely via email: [email protected]
Stephen Heymann (5 days ago)
this was not helpful at ALL.
bike Life (5 days 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 (5 days ago)
what platform is it?
Javier Flores (5 days ago)
Think or swim
Pogmo Thoin (9 days 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 (9 hours ago)
Try different stadiges on paper on TOS
Big Luna (10 days 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 (11 days ago)
nothing beats trading with a profitable strategy, i keep on winning with mr stephan Briggs handling my trades
Darlene Borges (11 days ago)
+andrew newman I was about dropping that , thst's the same mail i use to contact him for all my trades
andrew newman (11 days ago)
+lauren joe you can contact him with >> [email protected] .com , feel free to get along with him
lauren joe (11 days ago)
sounds good . please how do get in touch with him ?
Desmond Bradley (11 days ago)
i got my withdrawal yesterday , Mr Stephan Briggs is genuine, he has proven to be different from most of the traders i met here . I highly recommend him?
Darlene Borges (11 days ago)
Trading with him is the best thing that has happened to me , he's a genius , Mr Stephan helped recover all my loses while i was trading on my own.my colleagues also trades with him and he's doing absolutely great
Alex (11 days 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 (12 days ago)
Apparently i'm dumb. That's what i learned
Suman Rauf (4 hours ago)
Me too lol
Alex (11 days ago)
Chris Kline Nah man. The fact that you’re watching this at all proves the opposite.
johnsanabria17 (15 days 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 (27 days ago)
It is a lot easier if you go to Wharton or Stanford MBA in Finance.
As Above So Below (1 month 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 (1 month ago)
Is it call or puts?
Bin Jie Mai (1 month ago)
is this the same as bull debit call spread? if not, when do we use them?
rosalia muñoz (1 month 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 (1 month 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 (1 month ago)
4:05 shouldn't selling 100 call at 3 give you 300 ? why is it 30?
Raj Reddy (1 day 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 (1 month ago)
Nice video.. got the required information completely. Thanks
robert wade (2 months ago)
What heppends if i have 2 both ITO calls
MinDetonator96 (2 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 (1 month 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 (2 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 (2 months ago)
Eric Henry (2 months ago)
Bear market options
DIY GUY (2 months ago)
Options - Choices - Options - Choices
matt napper (2 months ago)
my poor little head is spinning, so much to learn
eugyero (2 months ago)
This year 2019 I shall try options and make millions or something like that. The best options explanation by far.
robert wade (2 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 (2 months ago)
https://www.youtube.com/watch?v=Zg6NUdnRiCk&t=53s
flydye45 (2 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
Juan de Dios Ortiz (2 months ago)
what
Koji seat (2 months ago)
God Bless. Perfect
Andrea Pastina (2 months ago)
Very nice explaination. Can you make a video on short box strategy?
GunP01nT510 (3 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 (3 months ago)
thank you nice job
Ivan Sweeney (3 months ago)
dude you make this sound like rocket science.....Your telling us to buy and sell stocks for 2 AND 3 DOLLARS WHEN NETFLIX IS SITTING AT 93 DOLLARS A SHARE BOTH OF YOUR VIDEOS ABOUT THE VERTICAL SPREADS DONT MAKE SENCE WHAT SO EVER... WHERE DO YOU GET ...STRIKE CALL WHAT IS THAT....WHY NOT JUST STAY WITH THE GROUP AND SAY BUYING AND SHORTING SHARES WHERE IS THIS STRIKE CALL COMING FROM.....YOU HAVE MADE THIS TO DIFFICULT FOR ANYONE TO ACTUALLY CARE TO LEARN
Yue Chen (3 months ago)
Seems great strategies. What is the real risk?
Retired MGTOW (3 months ago)
.
smokester74 (3 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 (4 months ago)
How would this work with Robinhood?
Nebderf 350zHR (4 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 (4 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 (4 months ago)
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Wesley Groth (4 months ago)
Learning to be a bear.
I Am Daisy. (4 months ago)
Good prospects but honestly I have Sir Dennis Mcneel to thank for my recent successes. He trades for me and his strategy works wonders.
Ismail Aly (2 months ago)
Mario Cruz never ever trust someone thats claims he has a strategy to win big in the stock market. Only listen to people that are willing to give you their knowledge of the stock market.
Ismail Aly (2 months ago)
Mario Cruz heck yeah if someone is making enough money from the stock market or trading options he would never ask you for money to trade with him. Because he wouldn’t have time for your bs 25k as he will be making millions.
Mario Cruz (2 months ago)
+Ismail Aly Ismail, are you saying that trading with Dennis Mcneel is a scam? I know that the same Tiffany Rosewell has done various good reviews for Dennis Mcneel in different places which in my opinion is suspicious.
The Sniper Trader (3 months ago)
Fucking bots man.
Ismail Aly (4 months ago)
Just like the investor scam from the Nigerian prince
monica brown (4 months ago)
txt for 💸 💸 💸 530 404-0768
Cris Conson (5 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 (9 hours ago)
Experiment on paper
Hua Ye (5 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 (9 hours ago)
That is a covered call
Wilfredo Manglapus, Jr. (5 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
megyn Kelly1 (5 months ago)
Please put a Link so people can find Where to find the CALL & PUT tradings!
megyn Kelly1 (5 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 (5 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 (5 months ago)
I understand this strategy, can I know what's the trading software you are using here?
Sky View Trading (5 months ago)
www.skyviewtrading.com/preferred-broker/
Dudorov Oleg (5 months ago)
Thank you sir
Martin Owen (5 months ago)
you all need to messenger this account manager he has very good strategies, that bring amazing profits
Mike T (6 months ago)
Am I the only one lost how this guy comes up with these numbers?
HD كاس العالم (6 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 (4 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 (6 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 (6 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 (6 months ago)
One can contact him for help & strategy via: [email protected]
Piyush Chauhan (6 months ago)
Make a vedio on bull call , how to understand the breakeven of that statergy . Thanks for hard work
Brunno Póvoa (6 months ago)
Please could you tell me, the software name that you use to produce the videos?
Piyush Chauhan (6 months ago)
Hi thanks for vedio , but how it is different from iron Condor statrgy
Kc F (6 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 (3 months ago)
It's called going short.. You sell first and buy later
Glauber Brito (6 months ago)
Great video. Thanks.
Amish Trivedi (6 months ago)
Options are difficult to understand.
Huguette Berthalon (4 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.
Hoglund Hudkins (6 months ago)
My recommendation is EIT Method for hassle free trading with frequent winning signals
Vladimir Putin (7 months ago)
thanks a lot
Israela Maccabee (7 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.
Stephen (27 days ago)
+Dennis Manzardo Jr And they have an education platform,
Dennis Manzardo Jr (1 month 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 (5 months ago)
Check out our website. We teach all of this. :)
bestoptionsvid thx
Judean Derby (7 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 (8 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 (8 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.
Ben Karden (8 months ago)
The Best
khup lian (8 months ago)
do you have any broker you recommend?
KC T (8 months ago)
You are simply brilliant
Kenneth Ma (8 months ago)
"Very small chance." Today Jun 25 2018 NFLX at 384
rotagbhd (2 months ago)
It was relative to the length of the contract.
Ray Huertas (9 months ago)
Which are the best trading platforms out there?
Naveen Manohar (9 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 (8 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.
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six6strings (9 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 (9 months ago)
great video. Crazy to think that NFLX went from 93 to 350 in two years...
Melanie Nguyen (9 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 (9 months ago)
Great videos for visual learners! You break down a complex process and make it understandable. Thank you!
András Erős-Fodor (9 months ago)
Netflix gone nuts
XBOXX ROCKSTARS (10 months ago)
it says on think or swim that when I try to trade this stategy it says it's illegal Why is that?
Brandon Bennett (10 months ago)
Write down all your questions and call TD Ameritrade at 800-672-2098 . They have been extremely helpful with explaining questions I've had on the Thinkorswim platform.
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Mike Arnold (10 months ago)
My question to you is how can you call guessing the stock market which as you put it a 50/50 gamble true in a bull market? You stated this concept in an earlier video. Doesn't past stock performance skew your option trading decisions?
Eddy Beckford (10 months ago)
Mike Arnold it does , you want to learn more or looking for new investments opportunities mail me [email protected] let's talk better
YAMIN alharbi (10 months ago)
can we use opstion spread for day trading
Eddy Beckford (10 months ago)
YAMIN alharbi you can but you will have to pair the right bht , you can mail me if you are serious about making money of day trading
SuperTennisManiac (10 months ago)
in your vertical spread example scenario 1, how do you take profits before expiration when you have sold a call option, meaning the one with the power to exercise his right is the buyer and not you? Therefore, how do you take profits before expiration if the buyer of the call option still has time to wait and the rights to exercise the option?
Not’cho Chip (10 months ago)
Wow so educational thank you
pfhrmb (11 months ago)
When netflix was below $100 lol
Brandon Bennett (10 months ago)
I know right... $324 at the moment... A lot of these videos dated back a year or two are like this. If only I had a crystal ball...
Robert Clark (11 months ago)
Very insightful, excellent job of explaining the vertical spread
Jay Lewis (11 months ago)
Can u buy a put and buy a call to break even too?
Eddy Beckford (10 months ago)
Jay Lewis yeah you can if you need more advice on trades or want to make money of trades mail me [email protected] mail
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