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agoodfriend

!SPREADS

Nov 1st, 2021 (edited)
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  1. Put Credit Spread (think the stock will go up) = sell a put that you think the stock price will stay above
  2. also buy a put below that
  3.  
  4. Debit Spread = you think it will go up = Sell a call below the current price of the stock
  5. Buy a call below the price of the one you sell^ (could be any price below, usually just the
  6. one right below the one you sell)
  7.  
  8. Pick a stock that generally goes up, and pick strike price below the current price of the stock
  9.  
  10. with debit spreads you’re profiting on volatility and can close out the position at any time. With credit spreads it’s best to wait until expiration but you can still close out of your position at any time, if it’s profitable or not
  11.  
  12. SELLING A SINGL CALL = you think the stock will go up to the strike between the call you sell and the strike price 2 below it, Pick the closest expiration date, sell a call at a strike price 2 dollars below the current price of the stock, you will have to buy 100 shares if the stock is $2 below your sold strike price
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