Loading...
Loading...
A trade that involves selling a closer-to-the-money option and buying a further out-of-the-money option, collecting net premium. Risk is capped at the spread width minus premium.
⚡ KEY TAKEAWAY: Defined risk = sleep better at night. Max loss is known upfront. Target 1/3 width of the spread as premium.
Bear Call Spread
Use when you expect the stock to stay flat or decline. Collect premium upfront with defined risk — your max loss is the spread width minus the credit received.
Calendar Spread
Best deployed when near-term IV is pumped relative to the back month — sell the expensive leg and keep the cheap one. Earnings season is prime calendar spread territory.
Premium Selling
Works best when IV is high, VRP is positive, and the stock is range-bound. Time is on your side.
Cash-Secured Put (CSP)
Only sell CSPs on stocks you're happy to own at the strike price. That mindset eliminates panic if assigned.