How I Trade Cheap Credit Spreads And Only Risk $25 Per Trade

You will be stopped out very very often with stops on Credit spreads or any option spread.

I’ve tried everything, and this market keeps crushing me. It’s like I take two steps forward and five back. I’ve blown through strategies, watched hours of YouTube, paid for 3 course.. still can’t stay consistent. /If anyone’s worked with a mentor who actually helps you trade while you’re learning, I’m listening. I’m done with theory I need results.

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All that to say you cut your losses early before expiration. Defending a credit spreads seems more enticing

Slow it down you sound like you were up all night at the club coke in up

Definitely got something to add to my toolbox. Thanks for this video! I like the risk management of closing a losing position. No need to wait for expiration and cross your fingers. If it breaks a key level and goes against you, get out!

Terrible video and delivery

Advertised Indicator cstt is apparently not available from the links, even if you joint a discord group.

Stop loss will hit multiple times so the win ratio will be low

I've been doing credit spreads and didn't realize you can use a stop loss for them, I'm on robinhood as well. Do you have a video showing how to set a stop loss?

Hi, I really appreciate the content you've delivered, but I noticed something that's a little bit disconnected. Yes, I agree the area between the last price and short leg is quite large and safe to check whether the trend is aligned with the plan, but if you put the stop loss at 2X of the premium, the 'wiggle room' is very small and we'd be kicked out early from the trade—and the distance is also far shorter than the short leg position, which makes the delta of 1.5 not really optimized. What do you think?

Sorry Austin, Where is the indicator?

new to options trading here…are you setting a stop loss order in addition to buying a put?

So you manually exit?

How do you place a stop loss for your options on Robinhood?

Amazing...yet not suprised. You define and state to trade with the trend, and then your only example is a counter trend trade picking tops and bottoms.

It's like picking up loose change in front of a steamroller.

that is false, if it comes to your stop loss, the prems could be much larger at 3-5x due to velocity and time decay (days to expiration)

i dunno about this 😂 so you making 5k a month from doing weekly options ? where your max profit is low and limited how many weeks you think in a month 😂😂😂

you will get stop out early

What trading platform are you using?

5k profit each month? Woah that's crazy! Congrats dude! But why are you selling your precious secret sauce for only a few bucks per month then? with $5k per month, you could invest on much better businesses and it would grow faster instead of wasting your time selling your precious autobot for a chump change here

By the time the stock hits the level your pnl on the trade might be more than 29$

Waste of time..Common sense strategy

Does this still work?

Mr. evenicantrade5214 is right: for people who already trade spreads, this was probably an understandable explanation of your approach. For other people, it would have been good to include a definition and an example: that a 'credit spread' involves writing a high-premium option and buying a low-premium option on the same underlying asset (as Investopedia puts it). In all the enthusiastic fast talk, maybe that got left out. But in any case, thanks for sharing your method!

Option is not a 24 hour tradeable. What does it mean, SL will not be effective when market is close, so one gap down or gap up open , you are doomed, don't waste your time learning this. Cash secured put for stocks or index fund is better way to go.

For 9 DTE you are far better off gambling ATM on a 50/50 basis specially on SP500 or Nasdaq , I don’t know how profitable you are but we are in a bull market and this strategy gives you 1% - 2% max buffer zone which is meaningless in a week. The better selection in my opinion in 30 - 45 DTE and $1000 spreads collecting $100+ (10% return). That has far better returns with far fewer volatility. Also never allocate more than 25% of your portfolio to spreads as a flash crash will wipe your account

you risk more than you reward.. no thanks

It’s not that simple. You clearly haven’t done a lot of trades. If it breaches your level the volatility will be so high that your loss may already be more than 100%

Relatively new to options but I'm confused. Why not just go with diagonals? Your cost basis is higher, but the gamma on the longer dated hedge is smaller...and you can place multiple shorts against it.
Buy one long DTE and sell multiple near DTEs against it. Theta is an edge...or an anchor, depending on how you use it.

How do you set a stop loss and/or a 'price' alert on Robinhood for an index? Can't find it in the app or on the web

So it's a casino game??

Absolute bullshit...
The thing that will determine the amount of money that you have to pay to exit is the current value of the stock, yes, AND, equally, if not more important, the volatility index of the product at the time of exit... If you apply a stop loss based on the stock price you could end up paying more than the actual difference in strikes when exiting (if the exited is made at market value - and I'm assuming it would be in this case).

i don't see your trend line on here to download

One factor to consider when doing credit spreads, is to not do them around major announcements ( Earnings ,fed news etc)

What scanner is this ?

Don't forget - if market moves huge after hours - you will lose big! Sell puts and company will declare chapter 11 overnight - you are done.

Using the 15/85 reward/risk ratio (and no stops), a win rate of 85% would show a breakeven expectancy. (15*.85=12.75, 85*.15=12.75) 0 expectancy. (no commissions). A 90% win rate would show an expectancy of $5/spread (1 lot).