Options trading video discussing short options and spread positions adjustments, by using directional trade and entry timing setups to buy long options or exiting the shorts.
When you leg into or out of an option spread, you do your trade 1 strike at at time instead of as a spread. Timing this ‘properly’ can give a number of trading profit benefits – including making more money on the spread than its maximum at expiration, and doing credit spreads that can’t lose money.
This video discusses legging into and out of option spreads, and reviews a timing problem with a spread legged exit. A 4.00 spread price hit the trader’s trailing price of 3.00 on a gap [and I am all for that decision], but instead of exiting the spread at one time, they tried to leg out and only ended up with 1.80.
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