Vertical Debit Spreads 101

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Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request.

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[isaaczafuto]

I know this is five years old, but I have watched so many from this series and it's all gold. I may not use all these strategies but I've learned so much, even on strategies I already used. 100% gold

[lorbeerinvestment]

Very straight forward and comprehensive! I must say as well that Mike totally rock these lessons, very fluent explanation from beginning to the end, this shows he really knew his sh... Well done sirs!

[KngSovereign]

this is still such an amazing series! I learned all about options trading from you guys

[tamkim]

Best debit spreads explanation! Thanks

[edg]

Mike, I truly like how you incorporate the concept of getting back the extrinsic value you paid via the short (credit) wing! Gives me just that much more 'edge' -- thanks!

[raulesteves]

The video is very informative and shows value in the way it teaches is the ins and outs of options. The only way for investors to make money is to employ their own strategy and work out the number themselves.

Well done mike the whiteboard!

My question for you is: how can I mix my backtested win% to the POP from options calculation?

[PrettyMoneyLife]

Best explanation I finally freaking got it! Thank you!!

[karensalazar]

Lots to unpack in small video. Great information and very helpful. Keep it up!!

[missjennablejen]

I love how mike's hair is always so put together in all his videos.

[Secretsofsociety]

Two key things missing from this video. If you are doing a debit spread the expiration should be over 3 months to avoid too much decay. Also it is best to open a debit call spread after the stock has been dropping for a while to get the least premium. If a stock moved hard to the downside you might find that calls you bought when the price was well above the bottom go profitable when the stock simply levels out. Debit long term expiration/credit shorter term expiration.

[EverettOversoul]

very clear and concise explanation. Thanks!

[codesymphony]

if the underlying rises to long leg before expiration can you close it for max profit immediately?

[sergiorodriguezbrianson]

what a great explanation! you rock man! thank you so much!

[glenmaxwell]

Hi Mike, Great video. I'm in a debit call spread with a max profit of 3.5. In the short term the trade goes against me and the short side becomes more valuable than the max profit. The trade is now turning around and heading in my favor. I buy back the short and let the call gain back the loses and make a nice profit on it. Is there anything wrong with this way of thinking?

[Adjil]

Great video! I like how you were able to set the put debit spread. Are put debit spreads a better vehicle for the set up then call debit spreads? If I have 100 free trades could I profit 25$ on this type of set up repeatedly?

[opoknock]

Hi Mike, what do you think of David Jaffee?

[terribreed]

Another great explanation. Answers so many questions I was wondering about including when to employ this strategy.

[DAGenao]

Hi Mike, at 10:50 you said when you sell a Put you want the shares to go down in price. Actually, when you sell a Put you expect the price to stay the same or rise. Did I get something wrong?

[lowbackability]

So do you have to let it expire to make profit?

[nikunjpurohit]

when should one book profit in spreads?30% of max profit? is there any statistical study like you guys did for iron condor?