Directional Trades versus Spread Trades - Part II

By: Chuck Hughes

 

In this video the Optioneering Team will explore the advantages of trading option spreads versus option directional trades.

When you buy a call option, the underlying stock must increase in price in order to profit from the call purchase. And at option expiration the underlying stock must increase above strike price of the option or you will incur a 100% loss of the option premium.

Option spread trades, however, can profit if the underlying stock is up, down or flat at option expiration giving option spreads a big advantage over directional trades.

Profiting on your option trade when the underlying stock/ETF is up, down or flat will result in a higher percentage of winning trades compared to directional trades and this higher percentage of winning trades can make you a successful trader.

Our option spread strategy recently produced $901,135.52 in actual profits with no losing trades. Learn how option spread trading can produce steady profits during market corrections or volatile markets.

 

 

 

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Futures, stocks, bonds, currency and options trading involves high risks with the potential for substantial losses.

PLEASE READ. Past results are not necessarily indicative to future results. There is a substantial risk of loss trading stocks and options with or without this or any other advertised product, service or system. Also, hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.