When you buy an option, whether it is a call or a put, you are placing two bets.
1st bet: a directional bet (long puts are bearish and long calls are bullish)
2nd bet: a volatility bet (option buyers need volatility to rise)
Factor in a time and probability element that goes into pricing options… and its no surprise that so many traders struggle to profit from buying options.
However, if you are interested in trading options without having to worry about implied volatility and all the other factors that trip traders up.
…then listen up, because I’m going to show you a strategy that is so easy to implement that you can’t help but start making money right away from it…
(The results are in and Weekly Windfalls is a winner!)
Well, you don’t have to:
- Fumble around with your targets and stops— it’s predetermined for you.
- Worry about when to get out— it’s predetermined for you.
- Worry about volatility— it’s neutralized for you
- Worry about time decay– it works in your favor
Don’t believe me?
When you buy calls… there are a few things that need to happen in order for you to make money.
For example, when you buy calls… you need to be right on the timing. In other words, if you buy a call option with a $65 strike price expiring next month when the stock is trading at $55… the stock has to move higher for you to make money.
That means when you’re selecting the strike price and expiration dates… you have to be perfect, otherwise, you’ll just be another statistic and lose money on those options.
Now, not only do you have to time your entries and need the stock to move higher… you also need implied volatility to move in your way.
If you don’t know, implied volatility is a forward-looking measure and shows us how much the market thinks a stock could move.
Well, when you’re long options… implied volatility directly affects your position. For example, let’s say you buy a call option when the annualized implied volatility is at 30%. Well, if the implied volatility rises to say 35%… and the stock moves higher… then you’ll make money.
On the other hand, if the implied volatility drops to 20%, but the stock moves higher… well, you could still lose money.
Sounds pretty bad if you’re a call buyer, right?
You need to watch your positions… be perfect on timing… and absolutely nail the direction.
I don’t know about you… but I don’t want to stare at my positions all day and have the odds stacked against me.
Make Money in Three Difference Scenarios With This Strategy
That’s why I developed Weekly Windfalls.
You see, my latest strategy allows you to set it and forget it… and it might be a better way for you to make money on your directional plays.
Unlike buying calls outright, with my breakthrough options spread trading strategy… you don’t necessarily have to be right on the direction.
For example, right from the start… you know your maximum profit and loss.
Here’s a look at what I’m talking about.
This is known as the risk profile. Basically, it shows you what your max profit and max loss are for a bull put spread trade on the expiration date.
Now, with this strategy, the odds are stacked to your favor.
Think about it as being the insurance company.
Basically, the way insurance companies make money is that they sell premium and protect against damage. Most of the time, they’ll make money… and just a handful of times they’ll lose a bit of money.
Well, with Weekly Windfalls, you essentially become the insurance company… but your risk is defined, so you can go to bed being comfortable with your downside. When you sell premium the way I do it… your win rates can be north of 80%.
You see, when you place spread trades (we’re only focused on bullish spread trades here)… the stock just has to stay above a specific level. That means the stock could:
1) Run higher, and you’ll make money and be at your maximum profit.
2) Stay sideways and trade between two levels. As long as the stock is above a specific price, you’ll make money.
3) Fall a little, but still stays above the lower strike price you selected when setting up the strategy.
Not only that, you benefit from time decay. You see, every day that passes… options lose value… and when you’re a seller of options premium, you benefit from that.
Let’s move on to an example where you would’ve made money on a spread trade… but lost money if you just bought calls outright.
Now, if you need a refresher on the intricacies of and how to set up the bull put spread strategy, click here to read more.
Bull Put Spread vs. Calls
For example, let’s say you were looking at Visa (V) on the daily chart.
Now, you noticed the stock breaking out and making new highs after a strong earnings report. When the stock was trading at $183.50 last Wednesday, the $185 options expiring on August 2 were worth $1.
Let’s assume you bought those call options.
Well, those options were trading for 75 cents yesterday afternoon.
Even though the stock moved higher… it’s still below the strike price… and with the expiration date coming
up… those options will lose value very quickly as each day passes.
Heck, even if you bought the $182.50 (the slightly in-the-money options) expiring this week… you would’ve been down a little on the trade.
What’s the alternative?
Well, you could set up a bull spread trade, like this one I traded in V.
Basically, I was betting V would stay above $180 by August 2. With this spread trade, my max profit was $5,700.
Had I actually bought the call options… I wouldn’t have made money at all.
However, with the spread trade… I was able to stack the odds to my favor and lock in $2,800… that’s about 50% in returns in just a few short days.
(Missed out on this Weekly Windfall? Well, that means you missed out on 6 other winners last week. If you want to improve your odds of winning, then click here to get started)
I’ll take the check instead of waiting and seeing whether those options will break above $185.
That said, the next time you think about buying call options… think twice and whether a spread trade would be more beneficial. Now, I went 7 for 7 last week on my Weekly Windfalls trades and locked in $11K.
If you missed out on that winning streak… sorry to hear.
On the bright side, there are more trades like these to come… and all you have to do is click here to see how you can gain access to this my breakthrough options trading strategy.
[Important Announcement: Registration for RagingBull’s Most Wanted is going to close soon… and you don’t want to miss out on my and Kyle Dennis’ unveiling of their never-before-seen powerful trading experience. Secure your spot today and tune in Thursday, August 1 at 8:30 PM EST. Click here or below to register. ]