Learn Spreads For Higher Profits
Dear Profit Takeover reader,
We had another epic Profit Takeover show today and I focused on teaching about spreads…
Did you miss us live? Don’t worry – you can watch the replay here:
Spreads – simply put – are a trading strategy to buy an option and sell another option…
I’ll choose a spread instead of single options when I notice specific parameters for one of these two indicators:
If realized volatility is below implied volatility – I’ll choose a spread.
If skew is steep on the call or put side – I’ll choose a spread.
“Why? What’s so great about spreads?” you may ask…
Spreads are an important strategy to learn to minimize risk – and therefore maintain bigger profits in the long-run.
Now on the other hand, when realized is greater than IV and IV is low, I’d stick with single options to play.
These are some instances when I’d recommend using spreads:
- Trading meme stocks are a great place to implement debit spreads because of the steep skew that we sometimes see.
- In a name like XOM (below) where the 10-Day historical volatility (green line) is above the implied volatility (red line) – a spread would minimize risk.
Image from wallstreet.io
Every Profit Revolution member has access to this trading software – wallstreet.io – and they are able to customize and view several indicators at once.
If you want to trade cheap options with me, learn more about how and when to implement spreads – and learn how to use this software yourself…
Join us in the Profit Revolution show every Monday through Thursday at 2:15 p.m. (ET) and Friday at 12:00 noon (ET).
Or click here to find out more info about what we are currently trading.
See you tomorrow,
Mark Sebastian
Founder, Profit Takeover
VIX TRAFFIC LIGHT
My VIX traffic light today is YELLOW…
Which means, I am expecting to see wild moves in volatility.
VIX futures are still in contango –
Which supports the wild-moves theory.
We got a great question from Torirose:
And here’s a clip of me answering that question…
VIX is currently at 26.32…
Image from Yahoo Finance
We saw VIX drop over the past few days but the market is soft so we may see a little recovery in VIX.
THIS WEEK’S SCHEDULE (ET)
Thursday 6/2: 11:00 – 11:30 am Brian King Simulcast
Friday 6/3: 9:30 – 10:00 am Profit Takeover w/ Brian King
TODAY’S WATCHLIST
- Apple Inc (NASDAQ:AAPL)
AAPL is teasing $151…
The stock is currently at $150.05 –
Image from wallstreet.io
I am curious whether AAPL can carry the market higher or if the rut is a sign to fade..
- Exxon Mobil Corp (NYSE:XOM)
XOM tanked into the close yesterday but it looks like it may recover some today
XOM is currently trading at $96.89…
Image from wallstreet.io
Other oil names will be making similar moves.
- Delta Air Lines, Inc. (NYSE: DAL)
DAL reported nice guidance – but is getting punished for it..
It’s currently dropping now at $40.19…
Image from wallstreet.io
I’d be looking for a cheap way to play the downside since IV is low.
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June 01 2022
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