Free Online Trading Lessons Archives
Premium collection income strategy, credit spreads
Option Selling with, or without, Insurance?
In today's markets, naked option sellers have been searching for alternative methods of collecting premium. However, the debate is still out on whether credit spread trading fairs better in the long run. View video below to learn about the advantages and disadvantages to option selling with insurance, and to determine whether or not this is the strategy for you.
Key points covered in this presentation:
* What is a credit spread and/or an Iron Condor?
* What is a calendar option spread?
* What are the advantages of using credit spreads, condors, and calendar spreads?
* In what scenarios do credit spreads make the most sense?
* The opportunity cost of using credit spreads
* BE calculations and margin comparisons
* Understanding the REAL risk of trading credit spreads and condors
* Determining whether or not credit spread trading is for you