Introducing
QQQSpreads
If you're interested
in trading options with limited risk
then this could be exactly what you're looking for.
Trading credit
spreads in the QQQ is one of least risky and most highly
profitable
trading strategies available to you.
Best of all...you
don't need a lot of trading capital to start.
As you know...there
are no guarantees in trading,
but if I only had one strategy to trade with options
this would be the one.
WHY?
Simply
put...
it's the most easy to be consistently right,
You
see...to be successful with credit
spreads you don't
need large moves to happen...
all you need is a small move up or down.
This is the beauty of it,
you greatly increase your chances of success.
But before we
explain Credit Spreads...
Ok...So
What Are Credit Spreads?
Credit spreads are
basic limited risk hedging strategies that allow
you to take advantage of the way options premiums
change in relation
to the movement in an underlying asset....here
being the QQQ.
You'd use a credit
spread when you're focusing on the underlying asset's
directional price movement (up or down).
What you would
do is purchase one option and sell another,
where both options are of the same type (call or
put)
and expiration (e.g. May) but have different strike
prices.
The option you sell
brings in money and the option you buy requires
that you pay money.The option you sell is always going to
give you more
money than the option you buy therefore giving you a "net
credit."
Here's
An Example...
If you sell a $1
option and buy a 50¢ option,
you will be left with a "net credit" of 50¢.
So the (number of contracts you trade) X (the "net credit") X (100) is
the total amount of money you will make on the trade.
So, in this case,
if you traded 10 contracts, you would bring in a profit
of $500 that would be available in your account the day
after you made the trade
There are
two kinds of credit spreads....
1.Bull
Spreads
&
2.Bear Spreads.
Bull Spreads can be either Call Bull Spreads or
Put
Bull Spreads,
and Bear Spreads can be either Call Bear Spreads
or Put Bear Spreads
A
Bull Spread is a strategy involving two or more options
that will
result in a profit from a rise in price of the underlying
asset.
A Bull Spread would be implemented by an investor who was
bullish on the
underlying asset but who is not bullish enough to buy a
call option straight out.
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BULL
SPREAD
Call option is bought
with a strike price of A and another call option sold
with a strike of B, producing a net debit.
OR
Put option is bought with a strike of A
and another put sold with a strike of B, producing
a net credit.
WHEN TO USE: you think the stock will go up somewhat or at
least is a bit more likely to rise than to fall. Good
position if you want to be in the stock but are unsure
of bullish expectations. This is the most popular
bullish strategy. |
A
Bear Spread is a strategy involving two or more options
that will profit
from a decrease in the price of the underlying asset. This
investor
is bearish about the underlying asset. One hopes to capitalize
on what
one foreseesas a downward movement, but is somewhat more
risk
averse than the outright buyer of a put.
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 |
BEAR
SPREAD
Put option is bought
with a strike price of A and another put option sold
with a strike of B, producing a net debit.
OR
Call option is bought with a strike of
A and another call sold with a strike of B,
producing a net credit.
WHEN TO USE: you think the stock will go down somewhat or
at least is a bit more likely to fall than to rise.
Good position if you want to be in the stock but are
unsure of bearish expectations. This is the
most popular bearish strategy.
|
So
Why Not Just Buy Or Sell A Call Or A Put?
Good
question!
From our numerous studies and back-tests on the QQQ
and US stocks we've performed...
a common pattern has evolved that proves it's easier and
safer to trade credit spreads over a simple call or put.
Check
out the example below involving a buy call with Intel...
11/28/2004. Intel Corp. (INTC) looks very bullish and
(according our technical analysis) should with 95% stay
within the trading
range (see the chart below), i.e. above 32.50. The current
stock price: 33.35
INTC
Strong Support above 32.50
Remember...
you must be very bullish on any stock to use a "Buy
Call" strategy.
Stocks have to climb very high before your call
option expires. Unfortunately...
this rarely happens very often. At the same time,
you cannot wait too long because the "buy call" time value
erodes.
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PARAMETRS
|
Open
Credit Put Spread:
Buy to Open INTC Dec3 30 Put and Sell to Open INTC
Dec3 32.5 Put with Credit 0.40 |
Buy
to Open INTC Dec 32.50 Call at 1.60
|
|
BREAK-EVEN
|
32.10
|
34.10
|
|
MAX
POTENTIAL PROFIT
|
0.40
|
Unlimited
|
|
MAX
POTENTIAL LOSS
|
2.10
|
1.60
|
|
What
you loose, if the stock price drops to 32.00
on expiration
|
Loose
0.5 cents or 0.25% per day
|
Loose
8 cents or 5% per day
|
|
What
you earn or loose everyday, if the stock price
stays unchanged (32.50) on expiration
|
Earn
2 cents or 1% per day
|
Loose
8 cents or 5% per day
|
|
What
you earn or loose, if the stock price reaches
33.00 on expiration
|
Earn
2 cents or 1% per day
|
Loose
5.5 cents or 5% per day
|
|
What
you earn or loose, if the stock price reaches
34.00 on expiration
|
Earn
2 cents or 1% per day
|
Loose
0.5 cents or 0.3% per day
|
|
What
you earn or loose, if the stock price reaches
35.00 on expiration
|
Earn
2 cents or 1% per day
|
Earn
4.5 cents or 2.8% per day
|
So
What's The Difference?
Our numerous
back tests proved that even after strong technical signals,
positive upward movements don't last long.
On
average...
they are not extensive enough to justify initial investments
in calls
(see the probability distribution diagram below).
For example, daily MACD signals give you only a 12%
chance that
the option will move 5% higher or more. In our
example, the break-even point
is exactly 5% above the current stock price.
Are
you ready to take this risk?
Are
the risks worth the rewards?
That's up to you...
but first take a look at the probability of success
with a credit spread.
The
same daily MACD signals give you an 85-90%
chance
that the posistion will NOT drop below the break-even
points for a front month credit put spread. Yes...
that's right an 85-90% chance!
Now which do you think looks better?
If you are on the conservative side... go for "Credit
Spreads".
Sign
Up Now
Great...So
How Much Does This Cost?
The
price is just $149.95 $99.95
a month...
for our introductory offer,
but only until
Mon Dec 1 2008
But
that's not all, you'll also receive
this bonus option
strategies ebook...
|
Free
Bonus:
A $69.95 Value

|
Covers:
-COMMON
MISTAKES MADE BY TRADERS
-KEY ELEMENTS OF AN OPTIONS TRADING SYSTEM
-STRONG TECHNICAL SIGNALS, IDENTIFIED
-HOW STOCK OPTIONS WORK, AND WHICH ONE TO CHOOSE
-KEY OPTION STRATEGIES
-"BUY CALL" STRATEGY
-"SELL NAKED PUT" STRATEGY
-"SELL COVERED CALL" STRATEGY
-"BULL PUT SPREAD" STRATEGY
-"BULL PUT SPREAD" STRATEGY
-"BULL CALL SPREAD" STRATEGY
-"BUY PUT" STRATEGY
-"BEAR CALL SPREAD" STRATEGY
-"BEAR PUT SPREAD" STRATEGY
-"BUY STRADDLE" STRATEGY
-"BUY STRANGLE" STRATEGY
-OPTION STRATEGIES COMPARISON
-RISK EXPOSURE AND GREEKS INTERPRETATION
- HOW TO USE PROBABILITY ESTIMATES IN OPTION
TRADING -Q & A
|
There
Is No Holy Grail In Trading...
If
you're looking for a sure thing in trading you'll never
find it.
It just doesn't exist...
QQQSpreads
is not some magic theory,but it works,
and we would hold it up against any competing system...
it's been backtested rigorously...
and there is no reason it will not work for you.
So
why continue spending thousands of dollars on testing
to find out which strategies really make you
money?
Why
gamble your money on far fetched concepts
that give you no meaningful methodology
or signs of mathematical probabilities,
So Sign Up Now
Remember...
keep it simple,you only need one strategy to win at this
game.
|
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