The Best Small Account Options Strategy for 2021!

if you just caught 100 in your lonely small account in this video we're going to teach you the best strategies for it to possibly turn that 100 into 200 and if you got a large account this strategy still works 100 return you're not gonna want to miss it so seriously the strategies that we're gonna teach you with that small account are gonna blow your mind in this video and all i'm teaching in the first segment is credit spreads then we're gonna dive into the best pattern you can trade with your small account then lastly we're gonna dive in how to scan for the best stocks to use for your small account cheap stocks that don't break your bank to pay for when you're using options so right here we're gonna teach you about credit spreads first and foremost because most people don't understand the power of them and like i said credit spreads just two trades with them could turn that one hundred dollars into two hundred dollars so credit spreads will do that with your account if you use them correctly and if you buy them at the right place most people have credit spread videos all over the internet but they don't tell you where to use them and how to analyze the risk of it that's why i come in the options expert but if you have a better small account strategy comment below the best strategy wins one month in my trading group or if you want seven days for free and you can't wait hit the link below i'd love to trade with you every day of the week but as you can see here this is what i'm gonna teach you first credit spreads with ranging stocks or patterns that have a range and all that means is that the stock has been trading with a defined support and resistance what that means is we can play the upper side and the lower side with credit spreads and this allows us to bring in passive income and as a trader as someone who has a small account passive income is nice because you can put in one hundred dollars go to your nine to five job get up tomorrow and you could be making money while you're working making money while you're sleeping possibly because time decay is in your advantage every day options decay and you can take advantage of that you can bring in that passive income and if we find the best ranging pattern it's so easy so right here is the exact resistance that the stock's trading in for big c big commerce down here is the support so once you find the support and the resistance you're gonna mark this red area below down there is we're gonna be buying put credit spreads up here is we're going to be buying call credit spreads we'll show you an example really soon but what you want to know is that it's going to be highly unlikely we trade inside this red range in this green range until the stock breaks out of this triangle pattern but until that happens you can collect income as it trades sideways within this white line here in this white line here that's income as long as it doesn't go in the red zone or the green zone so the call credit spread is where you're bearish on the stock meaning it's at the upper side here that's a perfect place for a call credit spread and a put credit spread is where you're bullish on the stock and that's where it could be touching the support level here or possibly right here at the lower part of the range so the lower part of the range you could be bullish the upper part of the range you can be bearish and take advantage of that so i'm curious guys why haven't you grabbed my free option trading course in the link in the bio so i'm going to show you an example from my course options domination of what a call credit spread looks like from a risk reward standpoint and then we're going to go into big commerce and show you a live example so right here is what we call max profit for a call credit spread and again call credit spreads are bought above the price and it's where we want the stock to stay below the strike prices we're using we want the stock to go bearish or trade sideways so in that scenario we are green and we hit that max profit if it is below the breakeven point and we can calculate that by taking the short call plus the credit that's the break-even point that's where you don't make money in this setup but if we go past the break-even point we start losing money in that scenario what happens is you might cross this white line and start going into the green zone inside the green zone is the break-even point inside that past that you're gonna start losing money so probably at the upper part of this green line you can start losing money but what you want to know is the credit from this trade over here is the max profit so the max amount you're going to make is the credit it's passive income it's basically coming straight into your account right away that's the best part about this the max loss is going to be your long call minus the short call minus the credit if you haven't yet make sure you grab my two books bulletproof recession proof setups link in the bio only three bucks we'll show you this in a quick second but this is straight from my options domination course i'm giving it to you totally for free so like subscribe please appreciate this free value coming at you but as you can see this is amazon we use in the course as an example the price of amazon is down here at the orange line that's the share price what we want to do is pick a stock strike above which is 2 365. we're going to sell that one and the one above that we're going to buy it by buying and selling we create credit and that's going to come into our account 180 dollars going into our account but if we ever go above this orange box above this strike price that's where we hit our break-even point and then start losing money so let's show you that over here we see this amazon example if we take the long call minus the short call minus the credit we have a max loss of three hundred and twenty dollars so for a small account you could bring in 180 dollars but the max you're risking is 320. so you need that amount to take this trade so you need a 300 account to possibly make 180 bucks which is 50 return or more on your capital so for a small account of three to six hundred dollars you could bring in 50 return next week using this strategy and the break-even point is calculated by 2 365 plus that max profit or the credit which is 2 366.8 so that's where we break even and that's where we don't make money but the risk reward here is 1.78 so we're risking more to make less which isn't ideal but when options decay we have a much higher chance of making money because they're always decaying and if we're taking advantage of that it's okay to take a bad risk reward so now let's show you that live example we're talking about with big commerce so at the filming of this video it's trading at 79 who cares what's trading at when you actually watch this video the concept is timeless but this triangle is what we're looking at so i'm going to be looking at this white line here to put my short call because that's above the resistance and then i'm going to put my long call a little above that and that's the credit i bring in is the difference between those two strike prices so we're looking at about 95 and 105 dollars so what i want to do is i want to sell the call at 95 right here and i want to buy the call at 105. so with this small account it only costs we'll calculate that in a second you can bring in a credit of 73 for taking this trade and it only costs you to get into it this 95 minus 105 which is 10 that's a pretty big cost unfortunately that's a thousand dollars and we minus that by 73. so the cost to get in this trade is unfortunately 900 bucks but what we do to lower that cost is we could always drop that 105 call down to 100 and now we're bringing in 45 dollars which is less unfortunately and we're risking 450 dollars because it's 95 minus 100 minus 45 so that's 500 minus 45 which is around 450 so you're risking 450 to bring in 50. not ideal but it gets better with this next example trust me so like we said the call credit spread is inherently bearish it's if we're ever touching the support line and we think we're going to drop back in this example i'm giving you with big commerce it's actually a bullish set up so taking a call credit spread is not ideal the risk reward is not going to be there because it's a bullish set up we're at the bottom of this support here and i do think we're going to run higher so if we run higher it doesn't make sense to buy call credit spreads it makes sense to buy put credit spreads so let's show you that example from our course this is the put credit spread where we make money if it goes higher so as you can see here the green line as long as we stay above the short put out of the money we make our max profit so again this is a bullish setup we need to go higher in price to make max profit if we fall back we could hit the break even and then hit the max loss it's calculated very similar to the call credit spread so we're not going to go into it let's again show you that live example show you why the wrist reward is better when you're buying things towards support in a bullish setup the wrist awards always going to be better so we're going to hit the puts here and we're going to do a live example of a put credit spread so sell put and then we're going to go down here and we're going to pick something towards this line which is going to be 75 and then we're going to pick something to buy an option to buy a little bit lower so that could be 70 so if we ever drop down these two lines that would not be good and i'll zoom in just a little bit more so you can see it we want that short put to be close to the white line and the long put to be inside the red box down here so again that's around 75 75.70 so we'll go here and we'll click it the puts we're selling 75 is pretty close that's why we're going to make more money so we click that and we're going to be buying the put lower so 70. as you can see here you're bringing in a lot more like four times as much you're bringing in a hundred and seventy dollars in credit and you're risking five minus that so let's calculate that for you so you can see the risk reward you're risking three hundred dollars to bring in 170. very similar to that amazon example we gave you earlier and again this is a high chance probability setup because it's inherently bullish it's sitting at support almost and it could run higher so if it does we collect 170 only risking double that that's a better setup for a small account and it should be obvious why so you might be saying the most obvious thing hey matt why am i risking more in a trade that doesn't make sense in the long term if i hit a bunch of bad trades i'm gonna have to have a lot of good trades to make up for it's gonna be hard to be profitable that's where this comes into play debit spreads well debit spreads are better because they flip that you're going to risk less to make more so instead of making 170 we could be making 330 and only risking 170 so two to one reward to risk instead of one to two so we're basically flipping that and this is where you can double your account so instead of 50 returns now we can look at doubling our account in one trade this is exciting trust me so here this is the scenario this big commerce setup is coiling and coiling inside a triangle up and down up and down up and down once we head towards this part over here which we will do that's where possibly going to break out it's very hard to call breakouts that's why there's more risk in this setup sometimes but once we start moving through these zones the green and the red zone that's we can start making money on this so for example this debit spread and the credit spread if we ever drop down we're buying the debit spread the put debit spread if we ever pop through the green zone we're buying the call debit spread you buy debit spreads when you have movement in the market so when we're moving in directional debit spreads are great because you can hit that max profit and then that's where you're locked in if you're moving south use that put debit spread here's an example and the funny thing is it's exactly flipped so the call debit spread looks exactly like the put credit spread is calculated the same as well so this formulas are down here you're risking what you put into the trade and your max gain is usually double triple or could be even 50 of that sometimes and the break-even point is calculated like that you can take a screenshot not going over too much we do have this in our course we do have this on a bunch of our videos too but here's the amazon example from the course we have the red one being higher now so we're selling the strike price higher than the strike price we bought this is a call debit spread so now instead of a credit of 170 we're getting a cost of 180 so the max we can lose is the cost as you can see here max loss 180 that's the most we're going to lose in this trade but the max profit is 320 which is almost 100 return and all we need for that to happen is we just cross this red strike price here if we cross in amazon 2 370 that's where we make the max profit and down here the break even price pretty similar to the other example and the risk reward is much much better for this as you can see we're risking 180 to make 320. that's why i like this a lot more so as always let's show you a live example from something that is trading currently big commerce which is at 79 so for this example let's say we cross lower into the red zone from here at 79 i think we could break down hard so what we need for us to make the max profit is we need to cross this last white line which is going to be at 70 bucks so we're basically flipping the credit spread to buying and selling the opposite strike prices so 75 once we pass that we can start making money and then once we pass that second white line that's where we make our max profit the lower it is the more we can make so i'll show you that too so right here i'm just going to flip those and show you what that looks like so we're going to be buying that 75 call and you know what most big accounts they can just buy this call and they don't have to sell that means that they can make more money they have unlimited upside the problem with small accounts is you don't have 365 dollars all the time but that's okay because options decay and if you have a small account you probably don't understand decay and options and trading so it limits your risk so credit spreads debit spreads are safer for beginners but for more advanced accounts you could just be buying this setup and what we do now is we sell that put lower and as you can see here it's a says up top put debit spread and we have the total cost being 170 but like we said previously the most we can make is 330 which is about 70 return if it goes past 70 lower so we always have to pass 70 to make that max potential in this trade so 70 or close to it will yield us that 330 dollars at the time of expiration and you can do this setup weekly because we are using options expiring weekly or monthly but before you go anywhere before i show you the best pattern you can trade as well as how you can scan for the best stocks to trade for small accounts i do want to go over cash accounts most people don't understand them as a beginner but they can change your life and make it easier for you to get in and out take profit all that good stuff the best part is that spreads when you put them on they can save you from day trades too we have a bunch of videos explaining that most importantly for beginners we do suggest in our trading group that you do go to a cash account on td ameritrade all this allows you to do is if you have a hundred dollars five hundred dollars you can day trade that amount every single day so for one hundred bucks you can make 100 one dollar trades with options every day of the week because the next day the cash settles you get it back in your account that's why we tell people go to cash accounts you can have more than three trades a week which is good if you're scalping if you're day trading or swinging you might take profit or scale out as we say the other best part about td ameritrade it's a great platform fast execution and great customer service when you're on robin hood you don't have customer service the execution is actually twice the amount of time to get in and out of a trade so if you think about it an extra three seconds is make or break with a pro trader if you're scalping it's make or break and you're losing tons of money every second you're waiting and then the platform is just great it's fast the charts are good as a good option chain has a good app on the cell phone good web platform i love it it's very very professional so for beginners small accounts this is a great way to start now let's talk about the best pattern you can trade if you want to make tons of money and actually buy long calls and long puts instead of credit spreads this is my best long call long put strategy and this is pretty simple it's just a triangle i showed you on big commerce and i'm going to show you it a couple more times triangles are the best pattern to trade because as they trade down they get to this one point in the triangle which is totally obvious is the apex down here and that's the point where it really can't trade inside the triangle much much more we know once it gets to there it's gonna break out pretty soon and once it breaks out it's gonna go hard because it's so pent up with buyers and sellers and it's so quiet once the buyers come back into it or the sellers come back into it we get an extremely large move which could be a thousand percent overnight this is my best thousand percent trading strategy and i have a video on this too and this is basically just a triangle with shorter term options and i'll show you a live example of that too but here we are this is just a triangle getting close but it hasn't broken out yet so as a trader what i'm waiting for is to get to the apex a little bit tighter and that's when i exactly know the big moves coming here's another great example this is tme we put this up in our trading group we put up these setups twice a week six to 12 of them and they're just great setups ready to go what you're looking for with a great bull flag this is what this is is you want that uptrend so as you can see tme has gone up for the last couple weeks and then over here last couple weeks we trade sideways above our range over here so we ranged higher and we traded sideways in the upper half of it which is a bull flag and we know that when we trade sideways after a huge move we have another huge move come up so here tme breaks out after we put out this chart just a couple of days later because we're very close to the apex and i'll show you that example right now and as you can see here tme was touching it one day and then boom broke out instantly went to sixteen dollars so around fourteen fifty to sixteen is a dollar fifty move and this was close to thursday which means you could have used weekly options and made a boatload of money because those options have the least amount of time decay on them and this is another great example we're using this is ipob and this is one stock that was trading on a steep trend line and it couldn't go any steeper because when we traded sideways here we broke out instantly and this is a multi-day runner this went from the lows of 17 to 22 bucks so in just the stock alone you could have made 30 to 40 percent in options you could easily made a hundred percent and again if these are anywhere close to expiration or anywhere close to the weeklies you could have made that thousand percent we talk about in our video and the reason i'm showing you this is because trading with a small account is as simple as having one great pattern and the triangle for me is that one great pattern to teach you to hopefully succeed and if you can time the breakout or get in when it's happening you can see some pretty large returns very quickly and all you have to do is scale out slowly leave some on to see how far they can go and that's how you do it with a small account let's again show you one example that one example we were showing you earlier tme was trading around 1450 and then jumped to 16 bucks so that was a dollar fifty move if we go to the option chain unfortunately this isn't going to be that thousand percent runner because the options aren't trading weekly we have monthly options here so at the timing of this video it's november 8th which means these options have about 12 more days till they expire so at the timing of the move it was two weeks out till expiration so that's a lot of time on those options meaning you're not going to make as much because there's too much extrinsic value not enough interest intrinsic values so right here if we were taking these 16 options and they moved to dollar 50 they would be moving in between the price of the 14 and 15 strike price so about a hundred bucks so these options would go from about 38 to a hundred so that's over a hundred percent return in a couple days just using this one pattern and if you are buying long options this is one of the best patterns you can use because of what i'm showing you because of what you're able to see in this example but don't go anywhere let me show you how to scan for the cheapest stocks to play for a small account something you can afford because as you know this pattern only works with smaller stocks stocks that are trading under 50 bucks maybe even under 20. you can't trade tesla amazon or netflix with it with a small account unless you're doing credit and debit spreads but credit and debit spreads cap your upside you can't make as much from it if you're just buying straight up options you can make a thousand percent i have one guy in my trading group that took 38 bucks to 380 1000 in one week and if he capped his upside he would never have made that much this one scanner right here is going to show you those best cheapest stocks to trade for a small account if you want to use this scanner i'll show you how to input it on thinkorswim all you have to do is go to the stock hacker section in the scan feature and then click all optionable stocks this means stocks with options come through the scanner and what you want to do is add a filter here an option filter you want to make sure the last price of the option traded was under 100 bucks this is for super small accounts like if you got a 300 account i want you to buy a 50 option with huge upside potential so again last price let's say under 100 bucks you can fix it if you want but this is my 100 best stocks to trade using this filter so over here we have the open interest being around 150 which means there's 150 people ready to buy or sell this option meaning there's some action in it you don't want an option with no action because then you can't get filled you're getting filled at a bad price it's not liquid enough next up you need the probability of being in the money being 70 percent this means you're not buying things totally far out of the money so a tesla option that is two weeks out has a zero percent chance of going in the money and it's 10 bucks you're like wow i could trade tesla for 10 bucks but then time decay rips it apart the next day you lose 50 we don't want that to happen if you're trading things with this high of a chance of going in the money you're not going to lose that much overnight and it's going to have more intrinsic value which is what we look for with an option especially with large and small accounts next we're looking at a stock price of at the minimum 420 and i just put that in because i wanted a hundred stocks and four dollars gave me 103 stocks so 420 if we go lower than that it's just not as volatile we don't get huge price movements we need a stock above four bucks to really start making that big money potential so all these stocks you're seeing have that potential for your small account to grow and be safe you're not going to be buying options too far out you're not going to be buying stupid options with it we got att wells fargo ge bp tac pbr itub and we're going to go over one of these just as an example to show you what it looks like so siri that's the example we're gonna use that is a stock that has met this criteria it's trading at six dollars and it was trading at the lowest here of five so five to six dollars is a twenty percent return in just the stock so if you're trading this 20 percentage of stock is pretty good for a small account but with options it's quite incredible over here from the corona lows to the highs we had a 50 return so 450 going into about seven bucks that's massive so let's check out siri options and show you the potential of a move from them how much you can make from them so right here siri we're gonna click the trade options tab and as you can see i mean the options are trading at 13 and they are at the money they're almost in the money and they're only 13 bucks so if this stock moves 50 cents guess how much you can make that 13 option is going to 45 dollars so you're basically tripling how much you can make if you had 100 in this trade it could go to 300 so for a small account 50 cents in a six dollar stock could double or triple your account that's incredible i definitely want to teach you that potential and as you can see here the range siri trades in is actually a 30 cent range so it's not 50 cents but recently it's around 30. so you could make maybe 100 within that range but if we ever go back down here to the lows of that september level we could make way more than 100 200 that could be 500 600 let's check it out so if we ever moved one dollar we're going to have a 13 option go to 248 so that's 2 000 return by the way 2 percent return with siri options so if you put one hundred dollars in two thousand percent is gonna be two thousand dollars one hundred bucks to two thousand this skill is invaluable so that's my small account challenge please like the video subscribe to the channel we'd love to have you here long term and again if you want to see my best small account strategies check out the next video to the right of me peace when you first get started trading in the stock market you most likely don't have a lot of money but you still want to make a lot of money from that small account and that can be very hard if you don't know the right strategies so in this video i'll be teaching you the best small account strategies you can use to turn that small sum that you have on your portfolio to a large amount stay tuned

Channel: Market Moves - Matt Giannino

Views: 32,946

Rating: 4.9073133 out of 5

Keywords: small account, small account trading, small account day trading, small account options trading, robinhood trading, robinhood app, small account strategies, trading small, trading small account, trading small account forex, forex, how to trade a small account, growing a small robinhood account, robinhood options trading small account, small account robinhood, grow small account, trading, robinhood small account, matt giannino, option small account, option trading, strategies

Id: DVV-Q_yUNJU

Length: 27min 36sec (1656 seconds)

Published: Thu Nov 19 2020