Options trading, and spread trades in particular are FRAUGHT with RISK.
Yes, spread trading can present quite a lot of opportunity for gain, but these strategies can cost your shirt... unless you use risk-averse techniques like what's in today's SlideShare.
This short class on slides will illustrate how you can STOP losing at credit spreads, and instead grow your nest egg steadily. The methods inside are not sensational, nor do they promise crazy returns... instead they focus on limiting and even ELIMINATING risk by the combining of options strategies that are already known.. but in a very unique way.
Using the "defense first" mentality I learned as a 6th degree Kajukenbo black belt, options are used NOT as gambling chips or highly leveraged instruments, but rather employed in a unique way to limit risk or even eliminate it altogether.
IN 2007 'The Blueprint Update' was published, which resulted in a January 2008 invitation to lecture the New England Risk Averse Traders (NERATS) group in Boston at MIT.
There were number of MIT grads and Ph.D's in attendance, my heroes :-) The fields of study included economics, mathematics, and statistics.
The the riskless spread trades known as Income Method #5 and #6 were presented, along with four other adjustments for "Bulletproofing" a stock. Since then, "The Blueprint" has been sold in over 40 countries.
Join me in this introduction to the world of low- and no-risk trading.
If you are tired of seeing YOUR balance dwindle because of covered calls, calendars calls, vertical spreads and other risky ways of trading... the slow but steady march of low- risk and no-risk trading techniques can be your answer.
Enjoy the slides! Please share, but do not change the content. Visit the blog at "blog.radioactivetrading.com" for more information. Also consider the premium video teaching, "How to STOP Losing at Spread Trades FOREVER" as you shop ways to insure your investments.
Happy Trading!
19. Let’s look at the
“Context” Trade
of our nested
spread,
A Married Put
20. Your stock is protected
by a “put” option…
GILD stock 100 shares $75.70
November $77.50 put +$ 3.80
TOTAL INVESTMENT $79.50
Protected by Put: -$77.50
Total Amount AT RISK $ 2.00
(per share; risk of 100 shares is $200)
21. Now there’s no limit
to how high your
“MARRIED PUT”
investment may go,
22. …but there is a
hard stop,
in case the
play starts losing.
23. GILD stock 100 shares $75.70
November $77.50 put +$ 3.80
TOTAL INVESTMENT $79.50
That’s $7,950 invested with
unlimited upside potential,
but a limited amount of risk
In this case the total amount
AT RISK is $200, or 2.5%.
24. Now let’s look at that
Bear Call Spread
again:
SELL TO OPEN $77.50: $2.10
BUY TO OPEN $80.00: -$1.10
TOTAL CREDIT: +$1.00
25. It gives you $100 at
the beginning, yes…
but has $250 risk!
31. The $100 income received for doing a Bear
Call Spread… takes the risk of the Married
Put down… from original $200 to just $100.
Just look at the red water getting shallower…
32. Meanwhile,
the Bear
Call Spread
has no
capital risk of
its own.
Risk in the
spread
would come
if we did not
own the
stock…
but we do.
$77.5/$80 bear call spread
has no inherent capital risk
33. $200 + $150 = $100 total risk? HUH?
(Yup.You actually end up with less
total risk by doing both plays!)
46. If you collect another $100…
…you’ll cancel all the risk.
• Aug 31: Married Put begins with $200 risk
– Also Aug 31“Nested Spread” captures $100... $100 risk left
• Sep 30: Bear Call Spread Expires
– “bank” the first Bear Call Spread, do another Bear Call Spread
– Capture a second $100!
– $200 total captured offsets the $200 AT RISK…
– NO risk left!
47. Whether the stock goes up, down,
OR sideways… we WIN!
No RED
Water!!
49. NAY-SAYER ALERT!!
This SlideShare was uploaded on Sept 16, 2016
two weeks in advance of the Sept 30, 2016
expiry of the Bear Call Spread.
Whether the goes down, up, or sideways, the
Bear Call Spread itself poses no capital risk.
Watch for the followup SlideShare to see how
this real example is managed!
50. FURTHER NAY-SAYER ALERT!!
The original blog post was entered on
August 31 and there are over eighty
comments at the time of this writing.
The riskless Bear Call Spread featured in the
blog post is commonplace. We have six others.
Watch for the followup SlideShare to see how
this real example is managed!
52. …ever coming back to “bite you”!!
You’ve learned to eliminate
risk in the Bear Call Spread.
53. The best part?
It’s not just the Bear Call Spread.
There are
SEVEN riskless spreads.
There’s more than ONE
way to peel an apple.
Get this two hour video on SEVEN different riskless
spread trades “Stop Losing at Spread Trades Forever”!
54. This quick slideshow is
just the start of “RadioActive”
riskless spread trading…
55. To learn more about Riskless Spread
Trading (and Bulletproofing!)…
56. …check out these articles on the
RadioActive Trading Blog!
You can Click these Links!
• Can You REALLY Do a RISKLESS Spread Trade?
• WHAT on Earth is a Nested Spread Trade?
• The Strange Secret of Riskless Spread Trading
• The RISKLESS Spread Trade that Pays You TWICE
OR! Get this two hour video on SEVEN different riskless
spread trades “Stop Losing at Spread Trades Forever”!
Notas del editor
Picture of a high roller
Cash in fist
Losing your shirt
Bear kung fu
Show the spread, emphasize the money
Thanks for the money
Show the spread
Keeping money
Caveat… shaking finger
Bear biting or losing in kung fu pose
Bear kung fu.. Or bull beating a bear
Imagine.. Wondering pondering
Imagine.. Wondering pondering
Imagine.. Wondering pondering
Picture of married put plus bear call spread equals heartbeat