How to Make Money Trading Options – The Vertical Spread

www.SkyViewTrading.com

The Short Vertical Spread (aka Vertical Credit Spread) is the most basic options trading spread. A Short Vertical Call Spread is a bearish/neutral strategy that consists of a Short Call and a Long Call… And a Vertical Put Spread is a bullish/neutral strategy that consists of a Short Put and Long Put.

Use this option spreads strategy to sell option time premium with very little risk and capital. Quit letting time decay ruin your trades and start letting it work in your favor. You can trade this strategy with an account size of just 2k while allocating very little capital to each trade.

Watch this video to fully understand how this strategy works and how to trade it.

Also, make sure to sign up for our FREE 3 Video Lesson Series at www.skyviewtrading.com!

Adam Thomas
Sky View Trading

option spreads strategies
option strategies
Vertical Spread Option Strategy
Vertical Credit Spread
Iron Condor
How To Trade a Vertical Spread
option trading basics
option time decay
consistent options income

Comments

Chris Gionas says:

You’re videos are great and easy to understand. Can you do a Butterfly call next? I’d like to learn it and there’s not a lot of good videos on it right now

Arsal Kahn says:

but I really like this vlogger for being honest with people giving you all the scenarios. keep up the great work.

Kurtie7 says:

Thank you, Sky View…..great info/lesson….way to go.

Theo Paine says:

Excellent explanation. The only thing I would have added to further show the power of vertical spreads is to state the potential ROI for that winning trade with 1st example — ie.. u sold a 100/105 vertical call spread for $180 credit / $320 investment. Multiple ways to win….If the stock tanked, remain flat or even went up a bit by a few points, max profits are captured for a 55% ROI. That is HUGE! U can’t make ROIs like that trading stocks outright.

Alvin Robinson says:

I am learning a ton from you about options! More from you than any other website combined!!

Ricky Castillo says:

Where did you get the @3.00 for call option and 1.20 for put option?

Jack Middleton says:

Seems like vertical spreads should just be used as security. The reduced risk should be directly proportional to the amount you stand to gain.

adrian petrov says:

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Alvin Robinson says:

Thanks for your wonderful presentations. Love it!

Green Bulls Red Bears says:

One of the best videos i have seen

Stolo says:

i want to learn how to do this correctly

Simbly Farah says:

anyone knows the intro music clip description? Thanks for the info.

Bob Papachryssanthou says:

How do you compute the math for the 130 share price example? Specifically the loss of 2700 and gain of 2380.

Ng Eng says:

So far best explanation with easy to understand visual presentation. Better still if the slide show be slower for better digestion. Thank you

Matthew Newell says:

this may sound very dumb but how does paying taxes on your earnings work

Arsal Kahn says:

I am not trying to be smart but let me add that the trade won’t have the same effect for everyone. but I appreciate the fact that the vlogger is a great guy explaining and laying out the scenarios.

Mr IceBoxStudio says:

best video ever

de de says:

Hi there! Thanks for the video. It s very helpful.
So should we always let all the contracts go expire or we should close the position before the expiration date if we are get wrong on the direction of the stock move.

Abhinandan Kothurkar says:

i did not understand, selling a call is a bearish stance isn’t it? then if the stock trades < $100 would you not be making money on selling 100 call?

Bama Bum says:

Question. I recently bought a Netflix vertical spread. I used the same strategy as you did in this video.
The stock is at 124 right now, so i did a spread with – Sell 130 Call, Buy 135 Call. This spread expires in a month. Do I have to manually close this spread before the expiration? Or will it take care of itself since it’s a spread?

Bubba198 says:

great video, however do tell the truth too about how one gets screwed! assignment fees, tos requires margin terms to touch any spreads, fico floor for margin approval and lastly daily interest due in an assignment outcome

Casey Griffin says:

My brain is on fire haha

Arsal Kahn says:

outlook has to remain bearish or neutral before you even consider engaging in this trade. but it’s a good one. anything can happen in one month. secondly, you can’t go too far away from the current stock price. you lose. again, it’s still a good strategy, although proper work is required to keep it in the money for a month. still a Good one for beginners.

NoWayFolding says:

Why is max loss $320. What happens if stock prices goes to 200?

THE SMALL CAP MILLIONAIRE says:

very helpful..thank you

ALLAN PLACIDO says:

this is so confusing..

somenath majumder says:

If you consider little long term period nobody get benefited from this type of trading except broker.

Money Management says:

By far the easiest explained  vertical spread strategy on YouTube. However i am still confused as to how you collect a profit before the expiration date or on it. Because to initiate the trade you have to buy  a short call vertical contract for lets say $1.00. Due to time decay this contract expires at $0.00. Is there something i am missing ?

Ricky Castillo says:

How will I know if I will put more money in call option than in put option and vice versa?

Andemah Solomon says:

which broker are you using?

Vannu Baskar says:

It is very good and simple,better to understand even non English speaking people.Thank you

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Fred Feltaee says:

Thanks, it’s easy to understand.

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muthureddy arunachalam says:

thanks for the clarity

Jose Quezada says:

Regarding the part where you would lose $2,700 on the Call Sell, couldn’t you use a Stop Loss to keep it say at $2,000? That way you would still make a #380 Net Profit.

Jhonn Patrick Polanco says:

This video is great! But I have no idea in which website should I start trading on? I’m a newbie and want to learn the world of trading. I’m a ambitious entrepreneur that hasn’t found his success yet so I would love to learn how to do this.

John Bergeron says:

What happens to excersied options? – New to this

YAGOONA says:

There is a general question that hovers in my head whenever I think about option trading puts and calls: On the last day before expiry I need to find a buyer for an in the money option, right? That means someone has to buy this off of me. An expample: I have bought PUT options on SPY and its in the money a week before expiry and SPY is still on the way down. I want to wait as long as I can to max my profit on the trade, right? Comes the last day and I have to now sell to take my profit. Am I not now at the mercy of holders of SPY to buy my put option so they can sell at my strike price?
What is the safest way to exit such a position to ensure success?

And a question about this vid. Are the expamples you give here only valid when you hold the underlying stock? You are selling puts on NFLX. You do not make it clear in your video but I am assuming that you must hold NFLX stock to do this. Am I right?

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