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Option Spread Differences | Options Trading Concepts

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Sometimes it's hard to visualize the differences between option spreads. Mike is here to change that. In this segment, he walks through a calendar spread, vertical spread, and diagonal spread, and how each of these relate to one another. New to options trading? Mike breaks down trading strategies and concepts in a visual way for beginner to intermediate investors. Click the link below to learn more: http://ow.ly/XRLru Follow: @doughTraderMike Use the hashtag #whiteboard to discover more options trading concepts! ======== tastytrade.com ======== Finally a financial network for traders, built by traders. Hosted by Tom Sosnoff and Tony Battista, tastytrade is a real financial network with 8 hours of live programming five days a week during market hours. From pop culture to advanced investment strategies, tastytrade has a broad spectrum of content for viewers of all kinds! Tune in and learn how to trade options successfully and make the most of your investments! Watch tastytrade LIVE daily Monday-Friday 7am-3:30pmCT: http://ow.ly/EbzUU Subscribe to our YouTube channel: https://www.youtube.com/user/tastytrade1?sub_confirmation=1 Follow tastytrade: Twitter: https://twitter.com/tastytrade Facebook: https://www.facebook.com/tastytrade LinkedIn: http://www.linkedin.com/company/tastytrade Instagram: http://instagram.com/tastytrade Pinterest: http://www.pinterest.com/tastytrade/
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Text Comments (10)
Sa By De Media (1 year ago)
long call spread. Can i trade weekly?
tastytrade (1 year ago)
You certainly could if you wanted to - we prefer to trade longer term timeframes as it gives us time to be correct if a trade moves against us.
Rahul S (1 year ago)
Kindly tell me to how find out the BEP (break even point) of butterfly,butterfly spreads,and if the position go against me then how to hedge that position....
tastytrade (1 year ago)
Here is a blog post we created that will be helpful: https://www.dough.com/blog/long-butterfly-spreads
SAMHANE110 (2 years ago)
On the short put spread, what's the purpose of buying a put, if we want the stock to rise?
tastytrade (2 years ago)
If you don't own the shares and want to use an option strategy as a way to be bullish on the underlying, a short put spread is one of the strategies a trader can use to do so. Long call spreads, long call diagonal spreads, etc. will also be the same assumption. Glad you are enjoying our content!
SAMHANE110 (2 years ago)
+tastytrade Wow, you answered. So I do a short put spread if I don't own 100 shares of the underlying stock? I know my questions are dumb, sorry. I am new to all this. Your videos have taught me a lot.
tastytrade (2 years ago)
With a short put spread, buying a put just ensures that if the stock price goes down, we cap losses at the long put strike. If I sell a short put spread for $1.00 that's 3 points wide, with the long put being 3 points lower than the short put I sell, my max loss is $2.00. If I didn't buy the protective put below the short put, my max loss would be undefined, but capped if the stock price went to $0.00 as a stock cannot go lower than that. It is simply an insurance policy on the short put we sell, and a great way to contain trade size in higher priced underlyings.
MrJaylassiter (2 years ago)
Thank you!
Gigi (2 years ago)
Great video

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