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How I Trade Cheap Credit Spreads And Only Risk $25 Per Trade

Austin Bouley 161 views

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You didn't mention how many contracts or transactions you do in a month I'll assume at holding almost to expiration allows you to collect close to the full amount say $20 At that amount you would need to profit on 250 contracts in a month to hit $5k
Comment from : @r1454

I don’t think Robinhood allows you to put a stoploss in on credit spreads
Comment from : @diaperstodiplomas

My problem with spreads has been huge moves in the after hours trading or pre market brNo stop loss is going to save you with $20-$30 swings It has caused some big losses in my account
Comment from : @JaredO-z3o

What happens during those gap down or gap up opening?
Comment from : @ygsrinivas

Ur not talking about the lower purchase/ long put u need to make Your profit / loss example is missing the cost of the purchase of the long put Your potential ‘limited loss’ amount is not accurate !brThe price of the long put won’t be as elastic as the higher short put The gains on the Lower long will not offset the short position loss !
Comment from : @jph6161

I'd rather stick to -150BP per spread or naked puts at high PoP otm than trade that tight at 50/50 near or atm To make that $5,900/m implies having at least 236 winning trades with no losers With a PoP 50 or less that's statically impossible
Comment from : @businesscat2895

Thank you - very well explained
Comment from : @ramaraksha01

Respectfully, I don’t agree with whatever you said There is something called probability one takes into account the probability into consideration before putting in a trade, probabilities in options are reflected by delta values Sorry but you are completely misleading the new traders
Comment from : @mohammedhashim2419

Watch out for IV rise because is a short vega trade Use this as an alternative for a long call or put spread when IV is already high but still expect a big market move Correct me if I am wrong
Comment from : @daniels3404

What do u mean by collecting theta
Comment from : @thawzan7370

I don't see any chance for making $5k a month by doing this
Comment from : @Wcbssg

for me, you were talking way too fast and zooming through almost everything for me to get any decent handle on it not a good delivery at all
Comment from : @showspotter

You are not providing an example of a credit spread (on the SPY), you are showing a naked putall you are showing is the short leg with a $21 premium calling that your income for the position The reality is that to get at least $20/share premium on a credit spread on the SPY at a support level (for a PCS), the SPY has to be trading near that support level As of today (1/29/2025) the SPY is trading at 604 Using the 3 month chart (like you are), support is at the 567 level If I want to sell a 566/565 PCS (a $100 difference you reference), the premium is $01/share, so it is not possible to trade the SPY using your methodology unless the SPY (or any index) as near a support/resistance level and IV is high, making this not a reliable means of producing income on a consistent basis
Comment from : @JohnSmith-qq9jp

Yes and nobrbrPlacing a GTC stop on options can have your stop hit prematurely as the spreads do widen and market makers run stops routinely brbrThis is especially true if you are not in a very liquid/high volume stock option
Comment from : @JohnYoga

While setting a stop loss is definitely a sensible thing to do, it drastically changes the odds for the spread to be profitable The pricing of the spread and its initial probability of profit are not reflected in the “truncated” spread Among various things, The effect are that you are not getting the right premium for the risk (because the risk to hit max loss given by your stop loss is much higher now) and you are more susceptible to the short term trend of the underlying Finally for 21$ you end up paying 3$ fees per trade (6$ total) in case you hit the stop loss brbrSetting a stop loss might be a good thing to do in some cases but:br- it alters the probability of profit You are appealing naive traders with the impression of high win probability setups, but it’s not the case br- these trades likely have a negative expectation value: in the long term they will be losing br- you don’t factor fees, which are high for “cheap” spreads br- you are suggesting trades with a likely unfavourable risk/reward ratio brbrBottom line, I find this video is shallow and superficial and proposes a naive and oversimplified trading method, which might be appealing to inexperienced traders with unrealistic expectations
Comment from : @filteringstep

Former professional pastry chef here, and one thing I will never do is have a margin account All my trades are supported by collateral from inside my account That is all
Comment from : @ConstitutionCamp

I don't stop loss, I hold, usually the stock does something, theta keeps corroding it so I just roll to next month, smaller position or a better strike price, I turned so many losing positions into winners like this, sometimes it takes months but I always come out ahead
Comment from : @DaniboyBR2

Not trying to sound trollish, but You start out with a trade that is going against the premise you set up at the beginning you’re in a down trend according to your moving average rule, yet you’re selling the Put spread Probably shouldn’t have mentioned the 10 pd Moving average if you’re not gonna use it you’re at a lower low, in fact, the lowest low Not a good trade in my opinion, or per your own rules
Comment from : @darrenmc5424

How many of these small trades do you put on to make 2k 100 per month?
Comment from : @lbutchj4877

Are short straddles not better??
Comment from : @Safarmanziltak07

Click bait video There's no way to put a stop loss on spreads If you want to sell your product be honest about it and say it in the beginning of the video
Comment from : @ap_0011

I really do say that, trading is best and profitable when you have good guidance like mine
Comment from : @KyleGriffins

I just have to applaud your content man, well done Long term investors know that the market and economy will recover eventually, and investors should be positioned for such a rebound I gained $180k from bitcoin in 2021 before the market crash and now I'm buying again, adding more at a time Having a good financial advisor like Julianne Iwersen Niemann, it will add to your success in the crypto market
Comment from : @BrigetGstar

Hello, I trade options please email me your strategies as you said in the video
Comment from : @HanSiddiqui

you trade like that might as well do a front spread with puts
Comment from : @kelvinc1053

If you have stop order, the winning rate will be much lower There is no simple way to have steady income We have to act based on market
Comment from : @williamli9329

Right…brRight…brRight…brRight…brRight…brRight…br…
Comment from : @agpilot2378

How do you have a higher win rate if your stop is next candle? Doesnt make sense for credit spreads, just buy normal calls/puts at that point
Comment from : @Spraht

How long have you been trading options?
Comment from : @marquise7494

Seams a bit misleading You say you trade in the direction of the moving average but than you show a trade that is opposite so you place a put spread which is a bullish trade in a downtrend also you don't show the $25 risk trade that is in the title so you should change the title to $29 if that is what you are showing Finally you exaggerate when you say you can make up to $5000 a month I don't see how you can do that with 1 contract and 9DTE You can only do 3 trades a month so in order to make that claim you would have to risk a lot more than $25
Comment from : @stts762

The most important thing that should be on everyone mind currently should be to invest in different sources of income that doesn't depend on the government Especially with the current economic crisis around the word This is still a good time to invest in various stocks, Gold, silver and digital currencies
Comment from : @NoahNollens

All this nonsense just to tell explain how to put a stop loss
Comment from : @elhamwaziry466

Very very bad video A put credit spread is when u collect the difference in premium from 2 put options One of those u buy and the other u sell What you explained is selling a naked put and naked call and setting a stop loss Please don't spread confusion and false information and go learn
Comment from : @T-Radi

Gaps will have you losing a lot more
Comment from : @mblankenship15

What about commissions?
Comment from : @yogash69

9 days in the S&P is forever! The chart can go 100’s of points in a day much less 9!
Comment from : @henryw5762

Cant find another video like this
Comment from : @watchgreatness2823

In my experience trading spreads (it’s all I do), when it approaches the short strike, your loss is significantly more than 1-2x loss
Comment from : @albertodeulofeu5277

How much do I need to get 1k per month?
Comment from : @edwinhunnet2666

Bro literally made a video about a stop loss
Comment from : @stroupej

Thank You for the video Great info Appreciate it If I could give you some advice it would be that you sound kind of salesyuhsalesmany subscribed
Comment from : @cdubsell

Thanks for this great video Need help implementing it… So, when setting the stop-loss, at what level do I set it? I’m using TastyTrade I just had one loss on a spread wipe out 5 weeks of gains So I want to undrestand how to do this
Comment from : @kenshaw9335

Hello
Comment from : @CoolBorn-k3w

@Austin You still having this same success with this trade strategy?
Comment from : @ksoonsoon

Whats the indicator? Can anyone help, it wont give me access
Comment from : @NotJohnJacobs

how do you mitigate the early assignment risk for SPY in your example? thanks in advance :)
Comment from : @MichelHabib

Outstanding Commentary!!! Priceless!!!
Comment from : @jimgeyer3475

Ummm you can reach -200 loss well before the stock even reaches your short strike
Comment from : @djayjp

Interesting video and nice you covered entry and exit strategy but keeping a stoploss might be not possible in case of violent moves or gapping up/down What is your experience with that?
Comment from : @markoosterling7480

This video is dangerous You're using Robinhood which is the video game of trading platforms Just telling someone to click and buy/sell without explaining what the legs of the trade are is grossly irresponsible There are no fundamentals explained here other than the stop loss, but even that is glossed over If you are going to recommend people trade options, but you need to tell them to be sure they have options enabled tells me your audience is extremely undereducated and naive "this is not financial advice" needs to be set as a court precedent that it in fact IS financial advice because its being brought up in a search of "how to"
Comment from : @anthonyschmanthony

Tank you Sir
Comment from : @bradyscallan734

Terrible video So you are saying when a trade goes against you you sell or have a stop loss? Is that really news? BTW: Having a stop loss is no guarantee it will sell exactly at your price
Comment from : @PappaLeans

My only gripe with your videos and many of your contemporaries is that you use your mouse to draw and write on your screen It would be great if you could use an IPad and Apple Pencil or something similar so that the screen doesn’t end up with chicken scratches all over it 😊
Comment from : @BarryFence

can I do this strat with $1k account
Comment from : @peterthon4010

Hello Great Video Am I blind or Robinhood doesn't allow stop losses on credit spreads/debit spreads?brbrI tried to place a limit order as a stop loss but it got rejectedbrbrIs the only way to buy the short leg and buy the long leg?
Comment from : @skimmy90

This video sucks… I am only half stupid…
Comment from : @jimmydoan007

So when you say winning $21 is per day?
Comment from : @davethenurse1031

Stop losses on SPY, no thanks
Comment from : @gregoryseemann4682

Thats the trick dont be greedy and get out at a fair price
Comment from : @mr_cozmik

Did he said put is up? Wth
Comment from : @veev327

This is dumb you’re better off selling credit spreads further out and buying closer to expiration so it counterbalances the spread like that if it goes up you make money as well and or vice versa essentially covering your azz its like a poormans covered call! You dont know wtf you’re doing
Comment from : @Downtime_videos

So what’s the name of the indicator?
Comment from : @TheBeaugarson

Great video Thx What delta number do you use? 85-win rate, that means 15 Delta Do I get your point?
Comment from : @Oct-jy4dz

This whole video could be summed up in two words - stop loss A small suggestion - forget trading, you'd be a great car salesman
Comment from : @millenialmusings8451

I have been trading credit spreads for about one year I am slightly down over that time The strategy I use is to enter positions at delta 20, 45DTE I close the position at 50 profit, or 40 delta I close for sure at 21DTE I try to keep a neutral delta overall The problem is that one bear call going against me, wipes out multiple bull put spread gains I am not sure how to keep the losers from wiping out my gains Maybe I need to close the losers sooner
Comment from : @skmorrow96

so why do a spread if you have a stop loss ? Is not the idea of a spread to have a known max loss ?
Comment from : @handdle-h2o

so stoploss is 2x the credit received
Comment from : @daoneishere2

Hi, two questions: 1) Are these vertical credit spreads? 2) Do you trade SPX?
Comment from : @GeorgeMcNeil-o6p

thanks again for everything can you expland why is market value allways nagative like you have -2800 Thanks
Comment from : @hannahkusutton5795

Risking $179, the kid is NO Risk Management Expert By his logic, and other buffoons' loudmouth presentations, selling naked out of the money calls risks nothing
Comment from : @marioarguello6989

I’m new to option, this may be a stupid question, why not just do a short put at the support level and set the same stop loss?
Comment from : @Wendywonder123

Fuck a stop loss, youll learn to get better if you dont use them
Comment from : @jeremyscorpio4170

Really good explanation best video I've seen so far on spreads
Comment from : @elblu248

crap, What happens when it gaps down?
Comment from : @michaelbain6092

Do you set a live stop loss or just watch the trade and/or set alert and close the position when it hits your stop loss level?
Comment from : @DinoTamer23

Well done thank you
Comment from : @bbulliard

It is a very good point to put stop limit to reduce loss in your clip But like some viewers (those who are veterans) below/above expound stop limit is not necessarily always working Maybe it is important to protect beginners/novices watching this clip by quickly including caveat explanation For instance: 1) Stop limit mechanism will not work during non-regular business hours including pre-market and post market period if the stock swings 2) Sometimes when the stock moves up or down too fast, stop limit mechanism cannot sense it and is therefore not triggered 3) Important days like Central Bank speech day including decision to increase or decrease interest rate, stocks may swing drastically during these days In addition, maybe suggest to viewers especially novices/beginners to use demo/paper trading first for trying out over a period of time because if the stop limit they set did not work for whatever reasons in their real trading, they (some may be students) will suffer greater loss Nonetheless, you have brought out a very excellent point to use stop limit, thank you for your kind presentation and sharing of knowledge Keep up!
Comment from : @benjaminlee6965

On contracts that you can’t BTC in 01 increments (bid/ask only at 05 intervals), do you just take the $5 hit to your credit to close it out?
Comment from : @Yt-user65000

Ultra dumb ideas
Comment from : @m82011

Loved this Can't wait to hear more
Comment from : @pharaohasar678

This guy doesnt even review his video before putting it out xD at 4:58 u said blue you enter put credit and white u enter call credit At 8:08 example shown white, and yet you entered a put credit as example lmao
Comment from : @RaphaelChia