“Credit Spread Options for Beginners” by Freeman Publications simplifies the complex world of options trading.
In particular, it covers Net Credit Spread options that are more advanced than selling covered calls and cash-secured puts.
Selling covered calls and cash-secured puts requires a level-one options account from your brokerage.
I acquired a level-one account and traded a few covered calls. It’s all pretty straightforward once you get the hang of it.
1) Net credit spread options require a higher-level account because you will purchase one option and sell one option. Buying an option requires more risk than selling a secured option.
2) One credit spread option requires two options. You will buy or sell one long position (depending on the type), and you will buy or sell one short position. This creates your profit inside of a zone.
3) Bull Put Spreads see you sell one short ITM (in-the-money) put and buy one long OTM (out-of-the-money) put. In this setup, you make money when the underlying stock rises in price, and both puts expire worthless.
4) Bear Call Spreads see you sell one short ITM call and buy one long OTM call. You’ll gain the most considerable profit if both calls finish below their respective strike prices.
5) Short Iron Butterfly Spread is a combination of a Bull Put Spread and Bear Call Spread. The window to maximize profits is smaller, but the potential gains are much higher.
These techniques may seem complex to you because they seem complicated to me. However, getting a firm grasp of them over time is good.
The idea is to make income from the stock market selling options consistently. They basically allow you to sell high-premium ITM calls and puts but purchase some security.
You receive the most money when both options expire “worthless” and keep the massive premium for selling the ITM option (call or put).
Most people view options trading as dangerous, but you can remove much of the stress and emotion by protecting your downside.
Selling covered calls and cash-secured puts are the safest options to trade; you are just adding a layer of protection to increase your premiums. Good Luck!
- PDF of the Month: Don’t Gamble with Retirement 10 (Free 419-Page PDF)
- Free PDF Downloads: Download FREE PDF LIST here
- Financial Mindset: Become CEO of Yourself 2 (Free 196-Page PDF)
- Retirement Planning: Your Retirement Planning Guide 2 (Free 255-Page PDF)
- Investing: How We Plan to Retire on Dividends 4 (Free 139-Page PDF)
- Cryptocurrencies: Counting on Crypto 2 (Free 159-Page PDF)
- Real Estate: Financial Independence through Real Estate 4 (Free 112-Page PDF)
- Business: Retire Rich, Retire Comfortable with a Business 4 (Free 149-Page PDF)
- Latest DGWR: Don’t Gamble with Retirement 10 (Free 419-Page PDF)
- Everything!: The Biggest Book on Passive Income Ever 3! (book)(Web Edition)(Art Edition)
- Writer’s Comparison: M1 Macbook Air vs. GalaxyBook3 Pro 360
- Read My Books for Free: Free Kindle Books Schedule
- Book Design: Design Tips on YouTube
- Kindle Unlimited: Why I Finally Subscribed Kindle Unlimited (learn more)
- Book Reviews: 505 Takeaways from 101 Books (pdf)
- Writing: The Publishing Chronicles (Part 1, Part 2, Part 3, Part 4, Part 5)
- Best REIT- Fundrise: Fundrise vs. US Treasuries (Join Fundrise)
- Follow us: On our Facebook Page and Join our Facebook Group
- Support the Channel on Cash App: $Kingmarine1981
- For more detailed analysis, join my Youtube: MFI YouTube Channel
PDF of the Month: Don’t Gamble with Retirement 10 (Free 419-Page PDF)
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
Leave a Reply