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How I Make $500 A Day!
Here is how I make $500 a day daily with a $18,000 account!
What is a Credit Spread & How Does it Work?
Have you ever heard of a Credit Spread? As a trader, knowing all the ways to make money is essential. It's all about maximizing your profit opportunities.
Here is the easiest way to explain a credit spread. You are making money on the theta burn and premium going to see. If you believe $SPY will stay above $400 and the current price is $403. You would sell a $400 and buy a $399P meaning each contract has a collateral of $100.
The collateral is $100 because you are purchasing a contract $1 spread away from each other.
If you expect $SPY to stay under $400 and the current price is $398 you would then do the opposite. You would sell a $400C and buy a $401C meaning you expect $SPY to stay under $400 by the end of the day and you would make a full profit!
A Credit Spread is a trading strategy that involves selling options at a higher premium than the cost of buying a lower-priced option. The difference between the two premiums equals your profit.
Not only can a Credit Spread generate regular income for you, but it can also protect you from potential losses.
The beauty of a Credit Spread is that it works in both bullish and bearish markets as well as flat markets. It's a versatile strategy that any trader can benefit from.
With proper risk management, Credit Spreads can provide steady income while limiting your downside risk. Do you want to learn how to create a Credit Spread? Let's explore this rewarding trading strategy together!
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