While you might be able to find some courses around that teach the basics of weekly options – what is not being shown is the exact strategies that work the best and are consistently profitable – and exactly how to place them and put them on – AND – perhaps even more important – exactly step by step how to go about MANAGING and ADJUSTING those positions to keep from losing big when a trade suddenly turns on you and how to go about turning a losing trade back into a winning one.
Be sure to check out our free ‘Trading Options For Income’ video and join our free options income email newsletter for more on how to learn to correctly trade, place, manage and ADJUST options for income. This stuff is actually quite simple. To join us for free CLICK HERE
Weekly Options – Credit Spread
While a weekly options debit spread is an options spread trade that costs the trader money – or takes money from their account – a weekly options credit spread does the exact opposite – it gives the trade a credit – or puts money into their account.
Here is an example of a weekly options credit spread trade on the fictional stock ABC which is trading at $50:
Weekly Options – Trade Example
Sell the 45 strike put option
Buy the 40 strike put option
In this example trade, the option trader placing this trade would have a bullish opinion on the stock. He or she believes that the ABC will remain where it is trading at or go up. And if it does, the trader will be able to keep all of the credit they received from this trade.
In fact, ABC could even move down from where it is currently trading at – all the way to where the credit spread short strike was sold at (the 45 strike) and the trader could still walk away with profit.
This is one of the reasons weekly options traders like this trade so much. They can set up a position where the trader can actually be wrong about their opinion of where the stock will be heading – and still walk away with a great short term profit.
Weekly Options – Learning To Adjust Positions
However, what is perhaps the most important thing to learn about making these types of trades is what to do if the trade moves too far against you. If the underlying were to make a big move against the position and actually get too close or even cross down through the short strike of your weekly options credit spread position – you could be in danger of losing a significant amount of money – UNLESS – you knew exactly what to do to MANAGE and ADJUST that credit spread position.
For more on how to learn how to properly set up, manage, adjust and protect these type of option income positions – as well as all the ins and out of trading credit spreads, debit spreads, iron condors, butterflies, ratio spreads, weekly option income strategies and more, be sure to join our free option income newsletter by clicking here