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.