An options credit spread combination put leg goes into the money on a large gap down – how does the risk-reward change, and what adjustments can be made through trading. The video also discusses some ‘base’ method setups for underlying trading – and whether they were also done as option trades.
This video covers a trading period where Facebook was addon short, but then taken neutral by trading out of a long puts and short calls in 2 options spreads and leaving a synthetic long. This more neutral hedged position was then reversed by going long the stock.
You may think of our trading strategy setups for entering or exiting trades. But they may be used for making option spreads adjustments to the individual legs, which can then increase overall profits, when compared to holding the spread intact until expiration.
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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