Trading Spreads

Once beginners discover that buying options is not a game they can conquer, they slow down and look for better trading ideas. At the top of the list of better ideas is the spread.

A spread is a position with two different options. The trader buys one and sells another. This is not at all complex, yet many educators don’t get around to teaching spreads until they consider the trader advanced enough to grasp the concept.

That does not work for me. I encourage traders to learn to use spreads as early in the game as possible.

I recently posted a video for people who are first thinking about trading spreads. It can be seen here.

I’ll soon return with at least one more new video lesson that covers vertical spreads. Those are spreads with options that expire at the same time. They are used for bullish, bearish and neutral strategies.

Trading spreads improves results in one of these ways:

    –**more frequent profits** (profits are limited, but this is my favorite reason)
    –smaller and limited losses (not all trades go our way)
    –reduced cost to play your market expectations

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