Call Debit Spreads Explained

all right here we go welcome to coffee with markers this today is episode 58 and today we're going to talk about what's happening in the markets and we will talk about option spreads what our options breads and we'll also talk about why should you trade them and when does it make sense to use them now if this is your first time here welcome before we get started let me give you a super quick intro why I am doing this show because you see here's what I'm seeing most people who start trading expect their account to explode they've seen the ads and emails that promised them to turn $2,000 into a million dollars and something crazy like this and then they start trading and they quickly realize that it just doesn't work this way so if you are sick of all the hype and empty promises then this show here is for you because my goal is to give this give you the strategies and the tools that you need to be successful because the last thing I want to see is you losing your heart earn money and you see here's my promise to you I will only show you strategies and tools that I personally use in my trading plus I'm keeping it real I'll show you all my trades winning trades and losing trades no hype just the fact so that you have the right tools strategies and the right mindset because I want you to succeed know if this sounds good to you then click on like now right now or or type heck yes in the comments and we'll get started okay awesome so good to see you here well first of all let's talk about the markets and let's see what is happening here in the markets by the way how do you like my new background ah see I created this to me I kind of like this so we're playing around with this a little bit have a little bit of fun with it with the show here so today we have a sea of red what do I mean by this man take a look at this this here are are the stocks of the S&P 500 and as you can see all of them are deep in the red there's only a few of them like a Qualcomm and here it's t-mobile they're sticking out but most of the stocks as you can see deep in the red so what is happening why the markets are down so as you can see the Dow Jones is down two and a half percent the S&P is down two and a half percent the Nasdaq is down two percent so let's see what is happening switching back here to a five-minute chart we see that this morning the stocks opened and just dipped lower lower lower so at around noon ish Eastern time I they started to level out and we have been just trading sideways so why is this what's happening here in the markets well honestly there's no real reason yes of course coronavirus case is jump yes but we have heard about this let's take a look at the world no matter where as you know for the past when is it since June 19th today is the 24th cases have been jumping up so this is really not the news that that make the market drop down let me let me actually show you the the real reason of why I believe the market is dipping down so first of all as you can see here I'm zooming in a little bit we have been boxed in for the past six days as you know so this is almost ten days ago it was Thursday June 11th when the markets really dipped and we had some volatility there and ever since market has been extremely quiet and this is where I said you know what unless we get some real significant news the markets will not jump and even today we don't have major news that make the market jump let me show you of why I believe the markets are going down here today so I'm going to show you what happens here since April 1st so I'm showing you right now since April 1st moving this a little bit over here the S&P has been up almost 25% so more than 20% now today is June 24th and in a few days the quarter will be over so if you are having a big hedge fund what what do you think you're doing right now you you're taking some profits right this is what I believe it's happening here because there is some profit taking because there's also some some sobering news of seeing what's happening in the market you see the Nasdaq isn't already making you all-time highs let me let me show you this so the Nasdaq is making new all-time highs there we go this work we are in February before the pandemic hit and then we were going all the way down making your attempt at the Dow Jones also recovered quite a lot from the highs not as much though as the S&P 500 and the Nasdaq here nastic already positive S&P almost positive for the year here so but this is where everybody is realizing well actually we're not where we were in February right I mean we do have more unemployment we do have still a pandemic going on we do have businesses that are closing now you see one of the things that you might or might not know so this is what I want to show you there's a lot of money on the sidelines this here is from as you can see LPL research who are looking at money in cash in the money markets now money markets what are money markets these are savings account and CDs this is stuff that not there is not paying anything it's point zero one percent or something like this something ridiculous but look at this how how much money is on the sidelines this is how much money were in cash in 2008 when we had the crisis right and then money flew went into the stock market and in real estate but you see how many people are waiting on the sidelines and here the deposit so according to the the Fred the Federal Reserve Bank of San Louis here as you can see deposits l commercial banks are also at an all-time high so this were a lot of money is still on the sidelines right awaiting to get back into the market but we want to see what is happening here in the markets know a few stocks that I want to mention before we talk about option spreads and what option spreads are and when should you use them let's take look at a few stocks that stood out today so one of them is being Hertz and oh dear Lord sorry herds has been in the news quite a lot so what happened here today as you can see yesterday Hertz wasn't around a dollar 20 and today it went as high as $2 40 so herds popped 100% why is this well there was an analyst that speculate that Avis might possibly take over herds or maybe even Carmack's or AutoNation now honestly let's go back to a daily chart I believe that that Avis has problems on their own so here's a chart of Avis as you can see here today Avis is also down 11% so I don't think that they're interested in taking on more cars from one of their competitors now looking at auto nation which is a retailer and that's quite interesting so why would a a car resale or be interested in Hertz well because they have this huge fleet right in it you can probably right now get the cars for pennies on the dollar during this bankruptcy but as you can see also ordination down 5.5 percent so this is probably not happening and this is why you also see here Hertz lots of speculation but pretty much pulled back a lot today so it was trading as high as $2 40 right now and a dollar 73 now a few other stocks so one of them being Disney so that's quite interesting because Disney was planning or is planning to open its theme parks in July so actually I believe it's on July 11th and July 15th and we've learned today that 7,200 workers signed a petition to Disney and the government and saying please don't open the theme parks and so this is why Disney is down here 4% a little bit earlier it wasn't put down more than 5% but I mean as said today pretty much everything is down this by the way is a website called fin waste this is where you see what is happening you see the sectors where you see also the whole technology sector down the communication services and so on now a few stocks that are on my radar right now before we show you exactly what I'm trading in my account our Airlines and cruise lines so if you look at for example American Airlines so American Airlines today down five percent right now a little bit recovering here it has been down as much as nine ten percent earlier here and you know that I have a strategy where I like to sell puts on stocks that are beaten down and so I haven't sold any puts today but right now the airlines like American Airlines like United Airlines they are on my radar also some other travel related stocks for example Carnival Cruise Lines who have known me I've now been downgraded to a junk by one of the analysts I mean down 11% today so these are stocks that I'm watching right now NCL age where I might sell puts and as you know this method aking strategy this were in a matter of weeks I believe it was eight weeks I took a 25 thousand dollar account to forty five thousand dollars by selling puts and this here looks really really promising now before we talked about option spreads and also I'll show you what I'm trading just let me just say hi to you because there are so many questions already coming in so good to see everybody here Caroline good to see you looking forward to applying knowledge with the optimizer software yes we will talk about that today I see a lot of heck yes Ron said it looks like a crime scene yeah I mean looking at the at the sea of red here Kathy says at least I have some puts I'll show you what's happening in my account here in just a moment and you'll see that I also have some ports and they are working pretty well so Madhu says like the outlook didn't like your video in the frame hey we're just testing something out so let me know if you if you like this this video in the frame here or not I thought it was kind of cool so we playing around a little with it a little bit but if you like the little my little bubble here better let me know in the comments really appreciate it okay now Kathy says like say Jim says I like the layout good good good and yes as you know we do have now a good good good Marty if you're interested in this drop a link it's called it's a stored Rockwell trading comm or the other way around works also Rockwell trading comm slash store I believe this is where he can get these mugs if you want to good good good okay so good to see everybody and so Ajit is asking do you think the profit taking our stock will go on tomorrow to maybe the rest of the week well you see I mean if you're a big hedge fund if you have millions of dollars in the market I mean hundreds of millions of dollars you cannot take profits in one day right and so I believe that today the increase in coronavirus cases is just an excuse to take some profits off the table I mean we'll we'll see we'll see what happens in the next few days but for the past six days we've been in this in this narrow range nothing has moved the markets here anyhow good good good so Peter says so will the market go down on Thursday and will it turn and go up so there's the being tomorrow I don't know trade what do you see not what do you think I'm gonna share it show you actually my account right now and show you exactly what I'm doing so okay if I would know what the markets do tomorrow I'm gonna I would probably put on a bunch of puts or calls but we never know we never know okay so I want to share my account with you so just a quick reminder if you're new here before we talk about option spreads because many had an interest in there I want to show you this this small tasty works account this is an account that I opened on May 19th and I put twenty thousand dollars in it so it's a it's a rather small account I have a very specific trading plan with this and I'll be happy to show you this trading plan let me bring it up here there we go there it is just need to fit it in the in the window here so here's the trading plan for the tasty works account and I'll be happy to send you a copy of the plan if you want you so I'm using my software the Powerex optimizer where the default settings and I'm taking all trades unless stock is completely trade crazy the bid-ask is too big or the risk of the option is more than two percent of the account which is four hundred dollars always trade in the money option and adjust the number of contracts to risk maximum four hundred dollars on this trade here are my exits and again for those of you who have been following me for a while you are very well aware of what this plan looks like and if you're new again I'll be happy to send you a copy of this plan all you need to go is go to Rockwell trading comm slash coffee oh so that is it I'll link a little bit later just enter your name and email address and I'll be happy to send you a PDF with this plan here so anyhow what I really wanted to show you is there we go what happened in this account so right now I have one two three four five six seven eight nine positions in the account as you can see out of these nine positions seven of them are in the green so there's the P&L that is open so I have a total P&L open of $1100 two of them are in the red and in terms of calls or puts yes I'm betting on a rising and falling market so the ones that are performing really well today is PAA it's support here's another one so I am trading options in this account and if you're new to options I have a new course that I'll be happy to give you for free it's called options 101 and you can get it on your phone actually it's a really cool we'll post a link to this course here in a moment anyhow as you can see so for today I'm up 420 dollars on this little account total open trades right now are around 1100 dollars so let's see how this goes over the next few days surprisingly also snap which is a call is doing well today so snapchat is going up today we entered I entered mu R and C e QP so these are the two positions that are enter today and as you can see they are nicely up so an M you are I traded to put options with the strike price of 1750 expiration August 21 and on see e QP I also traded two options o same strike price coincidence though anyhow this is what what I did today I was trying to still get into MP LX but this trait ran away from me anyhow these are my positions and as I promised you earlier I'll show you the good the bad and the ugly so you have seen when this account was up six thousand dollars you have seen when this account was down a thousand dollars I'm showing here the positive trade the negative trade so there's no hiding of anything think I have just sneeze isn't that annoying when you think that you have to sneeze and it's coming there we go it was of course perfect right in the middle of the show anyhow so good to see you here and I will answer your questions in just a moment I see that there's many questions coming in really appreciate it keep them coming type them in the in the chat box here as you can see and also if you're enjoying this video thus far make sure that you like this video and as always feel free to share it because in a moment I want to talk about options rights I think that they are fascinating I think that there's a lot of hype around this so I don't think that they are always good to trade but there are some instances when they are really good trade so let me just prepare a few things here on the screen because I want to give you some very specific examples okay so I'm bring this up I'm bringing this up perfect alright so let's talk about option spreads in the next few minutes I want to show you what our option spreads why should you trade them when does it make sense to use option spreads and I want to give you some very specific exact so let's jump right on the screen here and let's talk about an example so as you know the way how I trade I like to take my stock picks and option picks from the power X optimizer now there are several picks today for this specific examples I want to use b/e Bloom Energy Corporation so power X optimizer said that Bloom Energy Corporation is a buy at nine dollars and fifty eight cents now it hasn't been triggered today but the idea here is because I want to show you this very specific example so as you can see I've prepared a little bit for you because I want to show you why when does it make sense to just buy a call when does it make sense to buy a call spread and I want to use two examples here so the example is B Eve we want to trade me E if it goes above $9 and 5810 nine dollars and 58 cents now again according to power X optimizer taric's optimizer tells me exactly what to do so here it says that I should buy a nine call so design is the strike price here with an expiration of August 21st so let's write this down so the idea here would be to buy a nine call that expires on 821 so I want to show you right now exactly what happens if you would just buy a call and what happens when you are trading a call spread now first of all what it means trading a call spread is that you're buying a call and you're selling a call at a higher strike at the same time but let's go step by step right so don't worry so I'm going here to my trading platform right now this is one of my accounts I have total of eight or nine accounts I lost count a little bit there's a small account here and I want to take a look at B now again Horrocks optimizer tells me exactly what to do so if B moves above nine dollars and fifty eight cents we want to buy a nine call with an expiration of 821 I'm actually highlighting this in yellow so this is where we look at the August 21 and we are looking at the nine call and here is where we would buy it right now currently the price is at a dollar seventy now here's the really cool thing when buying a call here is what happens so if you would just buy the nine call you will see that our maximum risk is $170 I'd be a little bit difficult to see here so I want to write this down here first of all the trade would be by a nine call so I just say a nine see and the cost we said it's a dollar seventy now options come in 100 packs so this means that you have to bring $170 to the table so this is how much money you need at least in your account to trade one option by the way if you are absolutely new to options I have something special for you I did of course options 101 I'll post the link in the description you can download this course for free so all I'm asking is give me your name and email so that I can send you the details and I can live send you the login information for this course anyhow so the max risk this is where we see here the max risk is always exactly the amount that you are bringing to the table the amount that you are buying this call for so here in this case if you're buying this call for a dollar seventy your maximum risk is $170 the maximum reward and this is what you see here the maximum profit is unlimited because as soon as this goes above $10 70 you can make the money pretty much unlimited if the stock explodes higher right now it is trading at around $9 if this would explode to $20 you're making money if you get close to $30 you can actually scroll all the way over there and you see if it explodes to to $20 you would make 930 dollars if it to to $30 you would make probably $2,000 something like this but let's go back it's probably not going to happen so this is where we see the profit and loss so let's talk about where exactly the maximum reward is unlimited theoretically right I mean like a stock is unlimited I mean Amazon can go to 10,000 Tesla can go to 20,000 who knows not very likely but again we should say unlimited so the break-even the break-even when do you start making money is at $10 70 so if the stock moves from $9 to $10 70 in between there you're not making any money and this is what you see here this is where you're still in the red now you're not losing the the whole amount the whole hundreds it for $70 here let me just adjust this to 170 the markets are still open so it's jumping around a little bit but you see as long as it is above the strike price of 9 but still below $10 70 this is when you're still losing money now how did I arrive at the $10 70 well it's a strike price of 9 plus a dollar 70 that you paid for the call so is there a reward cap also a maximum reward no it is not it is unlimited right so this is when you're trading a regular call so now you might be wondering why would it make sense to try to call spread now first of all what does it mean when you're trading a call spread it means that you're buying a 9 call and then at the same time you are selling another call at a higher strike price for this example that I want to show you right now is that you would sell it so let's say the 12 calls so let me show you exactly what this looks like so instead of one auction you're trading two options so you would buy the $9.00 and you would sell the $12 so you see by the 9 strike you sell the $12 strike now let's take a look of what happens when you're looking at the equity curve how does this compare to buying a regular call well first of all the one thing that you notice is that you have to bring less money to the table why because you're buying this call for a dollar sixty-five and you're selling a call for right now probably around fifty cents actually this should be rounded up to 265 cents so it will be a dollar here anyhow so the cost is lower you're only paying $100 therefore you're max risk is also lower so you mix risk it's only $100 so as you can see you're almost cutting your risk in half by trading a call spread instead of a call now here's the drawback what about the reward the reward is capped too so this means that here you can only earn a maximum of two hundred and ten dollars and actually you know what as long as the markets are moving it doesn't really help so I'm saying I'm locking this this $1 here I lock this in place this way does move around because otherwise my whole example always moves around here okay so let's say we are buying this for a dollar in this case our maximum reward is only two hundred dollars so this is very important with a with a simple call your reward is unlimited it can go as high as possible here you are risking $100 trying to make $200 not bad at all your breakeven is also lower because we said what is your breakeven your break-even is the strike price plus whatever you're paying for this call so here your breakeven is at $10 so you make money quicker now is there a reward cap yes and this is exactly when the stock moves up to the to this strike price here there we go to the 12 to the 12 our collie so if it moves up to 12 you're no longer benefiting to a farm from a move to the upside okay so this means that if this stock explodes from $9 to $20 you're still only making $200 here we talked about it earlier when you would buy the call and he moves up from nine to $20 you're making what like $1500 so here it is very important that you have a cap now let's talk about another example but let me ask you this here is this making sense thus far let me know in the comments if this helpful and if this making sense click click on like because this way I know if I'm explaining it in such a way that is easy for you to understand or if I'm going too fast or if I'm going too slow if I'm going at the right pace do me a favor click on thumbs up and again if you would like to have more details on up to now if this course options 101 it's free just go to a link that we are posting right underneath the video here and you can get your hands on the course for the whopping price of zero dollars okay so I want to show you another example and I want to say okay what happens if for example we choose another strike price so if we choose a strike price we still leave the nine call but now we are choosing a higher strike price of 13 and this is where you will clearly see what happens in this case you're and I'm also locking this here at $1 20 for this example because otherwise the numbers jump around so this call here this call spread is a little bit more expensive than this one but not as expensive as buying the call outright so here if we would buy the nine call and we sell the 13 call it would cost us a dollar 20 so $120 so this also is now our maximum risk so you might say why would we risk 1 why would we pay more well this is where the max reward now is higher so our max reward for this trade as you can see right here is 280 dollars so again your broker platform can show you this there's other videos that explain you exactly how to calculate it if you want we can go over this when you see your max reward is 280 dollars the break-even here is a little bit higher it's $10 2010 how do you calculate the break-even you take the lower strike price add whatever you're paying for this spread in this case a dollar 20 so therefore it is $10 20 and here the reward cap you are benefitting from a move to the upside up to 13 dollars and even if it goes to 20 you're still making only 280 dollars so you get the idea what is what is a call spread let me just summarize it here and also tell you when to use what what is a call spread when you have a call spread a called debit spread you're buying a call and you're selling a call at a higher strike price both have the same expiration and you're doing this at the same time by doing so you're reducing your cost you're reducing your risk you're reducing your breakeven but you're also capping your maximum reward right so it is best to use a bull call spread so let me write this down when to use it when you are just slightly bullish so if you believe yeah the stock will go up but it won't explode higher it just will drift a little bit higher because as you have clearly seen whenever it reaches the higher strike price at this point you cannot make any more money so if you believe that B e we can take a look at the chart here why don't we look at the chart for a moment so if you believe that b/e can easily go to 12 dollars but not any further in this case it would make sense to buy this call spread a 9 call and sell the 12 if you believe that it has the potential to go higher obviously you would choose a higher strike price the higher the strike price for the sell the more expensive this spread becomes again but then also you can you have to risk a little bit more you break even go slightly higher and your reward is higher is this making sense so this debit spreads in a nutshell because many people are asking about this and they're asking when should I use this so now you know buying an outright call usually is more expensive and you're doing this if you're expecting an explosive move to the upside if you're expecting that the stop will only go a little bit higher you basically set the upper range here by looking at a chart for example and say yeah you know what I don't think that this here be e in this case we'll go higher then then $14 and if this is the case you could just enter a spread of 9 and 14 there we go let me just move this over a little bit [Music] okay and in this case you see that your risk would be $125 and the maximum reward if it goes all the way up to 14 is 375 anyhow so by using bull call spreads you're limiting your your reward potential but you're also reducing your break-even point you're reducing your cost and therefore you're reducing your risk well let me know if this is helpful and I will link to a few other videos here that might help you as well so take a look at any of these other videos and for sure get this option 101 course again for the zero for the whopping price of zero dollars so that you get a better understanding of options are when to use options and when it is more beneficial to just buy a call or trade a call spread here hope this helps if you like this video click on like and subscribe to the channel now go and watch one of the other videos alright so I know that we spend a few minutes on this but but is this helpful is this making sense so in the S they are also called vertical spreads so these spreads are called vertical spreads so there was a question and that is absolutely the case it is the same as an option spread you see options spreads there there multiple options spreads there's call spreads and there's put spreads and then there's debit spreads and there's credit spirits so today was just an intro I'll do another session where I show you exactly what is the difference between a debit spread that we talked about today and what is the difference or to a current credit spread so we'll probably do this in the next coffee with Marcus and I'll show you what what credit spreads are okay so I think we are had this Navid says is it the same vertical same as not straight yeah they are called debit spreads they're called call spreads they're called called bull spreads they're called vertical spreads yes you got this right okay Lindsey said this is exactly what I've been wanting to learn about thank you you welcome you're very welcome mark says a normal call is better for me for now probably but you see once you've wrap your head around you might want to watch this video a few more times but but it's the next evolution after you have been trading simple calls it might make sense you see if you already know that you will take profits at a certain level and Ricardo I know that you have the the power x optimizer so let me go back here and let me show you why it for example what makes sense here to trade a debit spread as you can see power X optimizer I'm zooming in here a little bit suggest that our profit are is at 13 17 so this is why we will anyhow take profits when this stock goes up to 13 17 so if this is the case we might as well do this by a 9:00 call and sell a 13 call you see what what is happening when we do this this is why it really makes sense to learn about spreads you're reducing your cost you're reducing the maximum risk and you're reducing your break-even point right so this is why it does make sense to learn about spreads and I know that Ricardo you're still new to options so yes absolutely start with buying a call in buying a push but then see it's not that complicated you're gonna love it you're gonna love it okay so good to see you so Nelson is saying would you buy and sell these as separate contracts and also close them out separately you can so let me just quickly explain to you what is behind this this question what the Nelson is asking here some brokers allow you to put on a spread as a whole so combined right so if you do this you can buy a spread and you can sell the set of the whole spread or you can buy these individually that you first buy the lower strike price and then you sell the higher strike price so which one is better whatever is easier for you to manage right because you want to make sure that you're not making any mistakes with trading so if it is easier for you to to buy it combined and then to sell it combined great if it is easier for you to buy it separately and then also close this the legs that's what they're called then separately you can do this now before I answer a few more questions I want to just quickly acknowledge everybody who left some feedback on one of the websites probably already know the drill so here we go there are a few folks who took the time to go to Google or Facebook or Amazon or the Better Business Bureau to leave feedback and I really appreciate it so you see the name desperately optimistic Danica Charles so if you see your name on the list here please send an email to Nicole at Rockwell trading comm Rosemarie please Molly on send an email to Nicole and Rocco trading , I want to just send you a thank you for taking the time there's AJ to leave a review on any of the sides about your experience with this show your experience with our products whatever it might be so just wanted to show this really quick okay let's talk about a few other questions that came in here so marina is asking why not the ball put spreads we'll talk about this marina so as we continue you have seen I mean Mark Rossi just said you know what for me I just stick to calls others are more advanced like you so you have already more experience so this why I want to do a few videos that build on each other so we start easy and if you say oh I already knew all this then look forward to the next video here anyhow good good good Kathy says how does it work with assignment avoid assignment whenever possible unless you really want to own the stock so we talked about it in the previous video in the previous video we talked about this tragedy that happened where a young man was a trader called Alex Kearns took his life because he was assigned and he didn't want to get assigned so Kathy my recommendation always close it out before expiration if you hold something into expiration maybe you make an additional five bucks usually it's not worth it you should close it out usually I do it the week before if you do two to three days before or maybe even the day before you will be on the say on the safe side I really highly recommend that you're not getting a sign that you're not holding since that are in the money if they're out of the money you don't have to worry about it options that are out of the money they expire worthless you don't have to do anything there but options that are in the money whether it is called or puts I highly recommend that you buy them back or that you that you sell them if you own them before expiration so you close out the trade here okay how many's asking should I write in your email for the option 101 no we probably leave a link right here in the description so my team will make sure that it's either in the tread somewhere here or it will be in the description and it's on our website all you do is you go there you put in your name so that I can address you like I do right now I meet also in the emails and your email address because I want to send you the login information you username and password how you can access this course and again it's a whopping zero dollars okay so our Cathy yeah make sure that you get out before you get assigned absolutely so zina is asking can you please explain how to exit this price well again if you're if you're buying it as one spread you can just sell it I personally usually buy the separate options so this is what somebody asked earlier right so I first buy the nine call and then I sell the other one and I close them out like I would do with any other options so that's what I personally do but again there's no advantage of one over the other do whatever you're more comfortable with and what your broker platform allows you to do so Cathy says unfortunately Schwab is very conservative requires a lot more really I think I will need to get a tasty works account um if you do if you are interested in tasty works account go to Rockwell trading comm slash tasty works by doing so they will know that we send you and this is where I hope that we can cooperate with tasty works where I might be able to get on their show or something like this so if you could do me a favor if you're planning to open a tasty works account either tell them that Marcus or Rockwell trading send you or even better go to Rockwell trading calm sweater tasty works will post the link in the description here as well okay so Cena is asking how do you make money with these in exactly the same way let me just shared with me with you again so in exactly the same way the only difference is so if you're buying a nine call what do you expect me to do you expect PE to go up right and the same here the only difference is that your that your reward is capped at the higher strike price so the call spread we're selling it it's still you want the stock to go up that's basically what it is same as a call the main difference is it's less cost it is less risk and your breakeven is lower this makes sense alright good so let me just go back here come back to you on the screen great question here my do is asking you can't do spreads with cash accounts you need a margin account I don't think so I don't think so I mean my accounts are usually margin accounts because I think it makes a lot of sense I am pretty sure I'm pretty sure that you can do them in a cash account as well talk to your broker or talk to tasty works okay so Roger is asking can we use this to take profits when we buy calls um no this right I mean again just see what I explained here it's it's a good question the point is here that you're just trying to lower your entry price therefore you're lowering your risk and therefore you're lowering your breakeven point it's not Forte it's not meant for tracking profits but it's a good question it's a good thought here boat is asking separate is more expensive as far as I know your brokers are charging you anyhow for each leg right so whether you enter it together as one you're most probably being charged twice the commission for two options so I I don't think it is more expensive here okay so one says all four positions closed in the green today yes I believe same for me that most of the positions that I've on let me just see where we stand I'm gonna share my account I have nine positions on and out of the nine positions seven are in the green so anyhow well good for you so glad that the parks optimizer is helping you to make money okay conscious tasty works very happy with their platform okay glad to hear I I just recently started using tasty words and again if you're interested in this to me a favor and go to rockville trading comm slash tasty works all it does it will redirect you to tasty works but this way tasty works knows that I sent you and this way I hope that they get more interested in talking to me and maybe invite me to one of their shows or let me do a webinar with for all the tasty works users and I thought this would be pretty cool so anyhow hmm so Donna is asking will you do this call spread on be e currently my plan Donna my plan says I'm just buying calls and puts but we are planning to do a special session for power optimizer users on how to do this with power X optimizer probably not before fourth of July so fourth of July is next week as you know markets are closed on July 3rd so next week will be a short trading week and we probably do it the week after and we're also thinking I mean if you're interested but by the way just let me know out of curiosity if you're new here and don't have the software that I personally use not not this one there's a broker software but the power x optimizer where I get all my stock picks all my options from if you don't have that yet and you're interested in getting it let me know because we are thinking about running special for fourth of July we haven't decided yet but we want to make sure that we are giving you a very special deal if you're interested in the software just let me know in the comments here good good good Rob is asking on their restrictions for certain accounts to use the strategy I'll look it up for you I'll look it up and I'll mention it in the next coffee with Marcus I do believe that these spreads they are fairly safe to trade fairly safe the risks are when you're getting assigned and we'll talk about in the next coffee with Marcus anyhow so I do believe that there's something that you can do right away call your broker call your broker and ask them it should be should be fairly easy here all right no I know that we already had a 45-minute mark know one thing usually we do this coffee with Marcus on Monday Wednesday and Friday this Friday there will not be a coffee with Marcus I'm taking a couple of days off so I'm taking a few days off tomorrow and on Friday so there will be no coffee with Marcus on Friday the next coffee with Marcus is next week on Monday whatever date that is lost track of time here video I hope that you have a great rest of the day I hope that this was beneficial if you feel that this helped you feel free to share this video with with your friends or with somebody who is also interested in trading and say hey if you want to learn more about these options spreads well watch this video watch a few minutes here because I believe that when you're getting into the markets education is important you might heard me say this before in the markets it is not the Bulls versus the Bears it is the educated where's the uneducated and what do you think who wins the ones who know what they're doing or the ones who are just saying oh you know what I'm just buying hurts and hurts well he probably explode 100% know right the ones that are educated and know what they're doing they have a much higher chance of success than those who are just jumping in like gamblers I mean you're high you just recently heard that more and more people flocking into the stock market right now because most of the the sports betting is still not possible and the stock market is not the same as sports betting not at all okay any oh let's break this up I have a great rest of the day and I'll talk to you in the next coffee with Marquez and right now watch many of the other videos on this channel they're pretty good YouTube probably suggest a few right now take care everybody

Channel: Markus Heitkoetter

Views: 16,100

Rating: 4.9550056 out of 5

Keywords: call debit spreads explained, call debit spreads, what are call debit spreads, how do call debit spreads work, how to trade call debit spreads, what are the risks of call debit spreads, what are the benefits of call debit spreads, trading call debit spreads, bull call spreads, vertical call spreads, buying vertical call spreads, buying call debit spreads, what are call debit spreads, options trading, vertical spreads, options call debit spread, options vertical spreads

Id: 9tkZOnG2bAs

Length: 49min 22sec (2962 seconds)

Published: Wed Jun 24 2020