There are two approaches to placing credit spreads on weekly options: one is to place out of the money credit spreads the pluck off premium the other is to place credit spreads in the way of a breaking micro-swing move or price bounce.
Weekly options offer us unique opportunities to capture plump, rapidly decaying options premium. Credit spreads offer us an opportunity to collect premium without having to come up with a lot of cash for margin. We will look to pin point opportunity for the sake of maximum profit while avoiding excessive risk and bad risk to reward ratios.
This is a home study course that will teach you the system: the entries the stop loss, the exits, the strategies, pitfalls to avoid and money management position sizing…. all of the information you need to trade the system correctly.
Sample Track Record. Actual profit results will vary depending on where you place your spreads and the width between the strikes of your spreads, the time held for decay of your spreads (we play directional movement on spreads and will take profit before Friday if price moves past spread strikes in our favor – decay happens rapidly so we often get much of the decay as well). Hence we will identify a track record in terms of the next strike In The Money spreads.
STRATEGY 1: CLF May through Oct. 2012:
= 40 W and 8 L
STRATEGY 2: CLF May through Oct. 2012 which is stacked, in combination with strategy 1:
WLWWWWWLWWWWWLWLWWWWWWWWWLLLWWWWLWLWWWWLWLWWWWLLWWWWLWW = 40W 14 L
STRATEGY 3: ’Set and Forget’: CLF 2012 Jan – Oct