five-star-trader-header-2023
five-star-newsltter-mobile

Options Analysis…

Hey 5-Star Trader,

As a self-made retail trader, I know firsthand how difficult it can be to learn everything you need to know about options through the internet. With countless strategies swirling around, I knew I had to decide what kind of trader I wanted to be and form a plan of attack.

Through lots of trial and error, one thing that really helped me was differentiating between key options strategies and creating a pro and con list for each. This week, I want to show you my table for “Selling In The Money Put Credit Spreads.”

Weighing Your Options…

The Takeaway:

As you can see from the image above, there are quite a few pros and cons for this strategy. So what next? After I have made my list, I then choose what market scenarios would work best for this strategy. 

For selling in the money put credit spreads, I find the best time to do this is when one or more of the following instances are true:

  1. You want defined risk
  2. You believe an equity will stay above a specific price
  3. You want to sell premium, instead of buying it
  4. You want a strategy to even out the positive deltas you’ve purchased
  5. You want a relatively stress free strategy

Weighing your options is a huge part of becoming a successful trader. Even if my strategies don’t resonate with you, I would highly recommend creating a pro and con table for each method you are struggling with. The results might surprise you!

-Danielle =) 

You can find more tips and tricks just like this in my Options 101 course.

Up Next...

Intraday to Swing Trading Indicator

 Since Danielle is out this week for spring break, Allison Ostrander, Director of Risk Tolerance, will cover how she’s used her Divergent Bar indicator for short-term earnings trades. This tool has allowed Allison to take low-risk trades prior to an earnings announcement with a good probability of following through with a higher high. She’ll also … Read more

Read More

The Monday Kickoff

Hey Traders! It’s only Tuesday, yet so much has already occurred in the market. Bank news rattled the markets last week and continued rattling them over the weekend. CPI data hit this morning, and it was in line with expectations. I view that as a positive because anything other than an inline reading could have … Read more

Read More

The Relative Strength Winners

The indexes have been sloppy, in addition to being relatively weak. The choppiness has some benefits, though, as this choppiness has meant that squeezes are consolidating everywhere. I can’t say I recall a time in which I have seen so many squeezes across so many different indexes and sectors simultaneously. What does that mean? It … Read more

Read More

Subscribe Today!

Want to walk the path to trading success together? Join Danielle’s “Five Star Trader” E-Letter for market insights, tips, tricks, and special bonuses.

Sign Up Now
all-as-seen-on-logos