Ratio Spreads - Best Option Strategy THIS Year?

Ratio Spreads - Best Option Strategy THIS Year?

My Option Trading eBook:

Chapters
0:00 Intro
0:20 What are the benefits of doing ratio spreads?
1:03 What is a ratio spread in option trading?
1:22 Example of our PYPL ratio spread
1:35 The details of my PYPL ratio option spread trade
2:15 How much we have at risk with this ratio option trade?
2:29 The potential explosive gains with a ratio spread
3:08 What is the potential win/loss of this PYPL ratio spread position?
6:02 How do you create a ratio spread?
7:16 What is the max profit of a ratio spread?
8:30 Can you close an option ratio spread before expiration?
8:51 Our current P&L on this PYPL option ratio spread
9:14 My plan for this PYPL option ratio spread position

Other videos you will like:

In this video, I'm going to share with you an option trading strategy that has the potential to give you huge wins! The PYPL ratio spread trade I'm going to share with you this video, allows you to go for a HUGE win while putting very little at risk.

Happy investing!
Randy Perez

#optionstrade #tradeoptions #tradingcoach

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Disclaimer: I am not a financial planner and am not offering investment advice. This is an opinion channel only and should not be taken as any form of financial advice. The ideas and strategies that I discuss should never be used without first assessing your own personal/financial situation, or without consulting a financial and/or tax professional. There are financial risks involved in taking on any monetary transaction that I discuss in my videos. I may receive a small commission from the purchase of any item from using the links listed above.

[smartoptionstrader]

Another Trade with the same potential loss of 3K could be the this: same expiration like yours, sell 1 60 Put, buy 1 30 Put, buy 2 or 3 85 Calls for the current credit of 800 to 900 USD

[RC-obin]

Randy, You are the Professor in options strategies monthly and long term.... I've been following and learning with you for 2yrs now. You have mastered options trading, and trades strategies out of we see out there in the market or what we see traders doing. Excellent. Rafael.

[dennistewell]

I would like to see a ratio spread using PLTR

[sour]

Hi Randy
Aren't ratio spreads and risk reversals more or less the same thing? What is the difference between them?
Thanks

[stephenoutram]

Can you do a similar trade with an index like spx? And then do it with both calls and puts, that way no matter what direction the market moves you may hit payday? One side will expire worthless, other side may payout big, all with the same amount of risk, except no early assignment risk.

[enki]

insane option strategy. after the spot etf passed, I will placed this strategy before the next bullrun.

[mlmsuccesswitherik]

Amazing video! Can you do this for puts? I think the market will crash in next 6 months. What option setup would create the most income for future crash? I have 5k

[luchitompt]

Randy, how do you protect if the stocks starts to deep? why not buy a protective put?

[terryneal]

Can't your broker take your short option, (exercise it) at anytime if it is ITM?

[fuzzyboomboom]

As of Sep opex (9/15), PYPL has never been above $65, and traded as low as $50.25 on 10/27. You should explain the risk of the trade if Paypal stock price went down, which it has done. Also, you should explain the tricky nature of all ratio spreads - i.e., the "Valley of Death" - the large dip in the trade's P/L curve that will become more severe the longer you hold the trade. And explain that the b/e for the trade will keep getting farther away the longer you hold the trade, also.

Interesting way to trade ratios, though, so thanks for sharing.

[diverdown]

Hopefully it fills that gap for you!!! I like the strategy though!!

[Keto_Mike]

So in this strategy are you selling a naked call to get that premium ?

[TheMadMariner]

Is this actually a ratio spread? It doesn't fit the standard definition, though perhaps we should think of ratio spreads as more of a concept than a specific structure.

[kesor]

You could also buy those 6 140 call options for just $664.2 total cost excl. commissions ; And you would be risking either losing that $670 or winning even more than those $111k.

[MeanGene]

But your $-3000 loss is a "loss on potential income", which is not like selling a put where you would be assigned shares and have to have the capital in the account to sell the put, correct?

[kevinbrowne]

Please clarify: you BOUGHT a $120 CALL so why doesn't this trade start to turn a profit once PYPL's underlying price rises above $120?

[DC-nbdu]

Thanks for presenting this strategy. I like this approach better than buying outright or a high delta LEAPS. PYPL has dropped considerably since 8/1 and you’re still OK.

[DoctorBiscuit]

The math doesn't seem to add up to me at $130 at expiration. Why is there still a $3, 000 loss?. It seems that the $65 and the $95 cancel out with a $3, 000 loss. But if you own $120 call and it's $130, seems like you make $1, 000 for a total of a $2, 000 loss not a $3, 000 loss

[patboy]

How is that trade going, now that there's only 3 months left to expiration and the stock isn't at 90$ yet. It seems like it will be a loss, no?

[knowledgeunderstanding]

Not showing if stock is between 65 and 95