A

He doesn't want to tell the viewers that, it's bad for business.

So, according to you there is always a risk that some exogenous event will occur overnight that would cause losses in this trade. That risk exists with any investment (except T-Bills, I suppose). Of course there could be losses. Each trade has a max loss indicated when you put the trade on. If you can't afford the max loss, reduce the number of contracts or don't trade at all.

In other videos, he shows how to adjust the positions if it looks like the market is going against you, and how the adjustment reduces the potential profit.

“ When the trade goes against you” …its pretty much game over in most cases before you can even respond to it

Thomas if you go to Optionsclass.com and watch this webinar, if you end up joining, we meet each week for an hour to go over all sorts of options topics.

Indexes are cash settled.

So the only thing that gets put to you (or taken) is $

Yep. Plus SPX has expiries on Mon, Wed & Fri. Equities only have expiries on Fri. This works great for ppl that trade O DTE options.

Yes, each trader needs to set up a target profit and stop on each trading concept and certainly with weekly trades, where profits can flow into the trade quickly, it's quite possible you can close the trade at a nice profit well in advance of expiration,.

@@sethfreudberg4750 In this kind of a trade if it was going against you would you ever attempt to adjust or roll .. Or is it simply too short a trade?

Totally agree. No strategy should be considered complete unless you have a clear understanding as to what exit strategy and adjustment strategy you should have in case the market goes against you. What's presented here therefore is only half the story.

U wouldn't buy his course if he gave all the info here

@@poppapips7493 He wouldn't sell any course if it some kind of surely profitable. He would just make money

whatever the options are worth at the time you close is your difference. you buy back your short legs and offset that with the remaining value in your long legs and your credit received. all your options still have theta inside, so their value could be a little bit inflated, but this is offset by all the other options. expect to give back some but not all of your initial credit gained

Just to check, on the day of expiry, do you need to buy all your positions back or just let them expire to keep the credit?

sure Michael. Our options traders generally use the SPX vs SPY because it requires less contracts to trade for the same amount of capital. Trading the SPY would result in higher commissions because you will need more contracts for the same amount of capital

@@smbcapital Also, you could get assigned on SPY as well, correct? Unlike SPX where that can't happen.

most of the options income strategies are run on indexes bc you have reduced overnight risk vs individual stocks. why we mostly trade indexes and not stocks for more complex options strategies

@@smbcapital Thanks for the response and ALL you do. I'm truly grateful and impressed by your professionalism and attention to detail. LOVE LOVE LOVE you people, FAVORITE KZfaq channel!👍

not so cool at all if the spx stops at the protective price

Any better strategies? Credit put spreads should be a better weekly strategy with a better risk/reward ratio

Although what you mentioned is true, you almost always don’t want to wait till the price rallies above 3010 while still holding this position, closing the spread out asap if the stock got into the fly body early. You might close for a minor loss but better risk management rule should applied to stop your loss, and same applies to the put side.

@@jeremiedumas8555 this is the way, or diagonal calendar spread if you don’t care about margin requirement use in ur account.

@@eddiehillergrand8882 But the problem is that the exit door might be very crowded when you are ready to get out.

I'd have to back test to see whether this is better setting and forgetting it, or whether it's better to employ a defensive adjustment strategy. Many weekly strategies do best as set it and forget it trades though, subject of course always to a stop.

I’m pretty sure that at a moment a strategy is created, a trader puts an asset in limits the strategy makes sense. For instance if we sell a range, this strategy exists only when the asset is in this range. If a breakout happens the strategy must be bought back with fixing looses. Trading of options also consists of series of profits and losses as any other kind of trading. Adjusting of option strategy is like to wait for a market bouncing to be in a positive zone. This hoping every trader must avoid. The only adjustment accepted is to manage Vega when theta is sold imho

@@sethfreudberg4750 I would be really intrested to see what would happen in reality if you set a stop loss of 2x the 695 .... and otherwise let it run.

yes

Is the margin for canadians more than the max-loss in the trade? In this example I think the credit was about 10% of that max loss for this 1 week trade. That says nothing about the real risk of loosing though... especially in a nervous market and president with a twitter account.

@@backspin1448 yes it is.. margin is much higher than max loss for canadian ..so stupid.

@@naoufeltaief Blame your Canadian laws to `protect ` the people

Canadian solution: stick to buy side calls/puts in tsfa account until u can move to the usa. Canadians have the highest broker fees and margin fees in the world...and USD conversion fees/interest on accounts. To open multiple leg options are not financially viable never mind adjustments.

It looks like he's using 24 delta strike on call side and 19 delta strike on put side. But, I'm not sure if that's how he picks his strikes.

@Josh Kilburn yes. he probably starts with the short strike first at the 16 delta

The potential loss should be mentioned since as described it looks like a cash machine. Maybe course discusses management of trade With short time frame will be hard to deal with tweet driven moves.

The short strike is typically one standard deviation out of the money on both sides, Ashok.

@@lauriejones7834 I agree, need to mention the downside and how to manage.

Seems like an expensive version of an iron condor

i agree bro..

How much are the courses?