Today, I’m going to do everyone a big favor and demystify simple credit versus debit spreads.
So in this short video, I’m going to explain the difference between credit and debit spreads, and give my rules of thumb for trading them. I’ll cover using a credit spread to help finance a debit spread, highlighting the importance of considering the VIX Volatility Index in trading decisions.
📈 Debit spreads are a good option when the VIX and implied volatility are low.
📉 Credit spreads can be used as an income strategy, especially when the VIX is high.
💰 Bull call spreads are a debit spread that involves buying a call option and selling a higher-strike call option.
💲 Bull put credit spreads involve selling a put option and buying a lower-strike put option.
🔄 Limited bullish risk reversals combine a bull put credit spread with a bull call spread to reduce risk and potentially increase profit.
Lance Ippolito
Lance Ippolito Trading
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*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
P.S. Get Ready for Some Fireworks…
Historical performance during election years shows stocks could experience the most volatile period up to Nov. 5th.
But I’m not worried…
That’s because I’ve come up with a little “loophole” that lets me target overnight moves of $500 or more based on a $2,500 starting stake..
It’s all thanks to a phenomenon happening all across the stock market right now…
That’s opened up a new door for regular folks to grab their slice of the millions, sometimes even billions of dollars going into specific stocks each day.
Not in a month… Not in a week… But in as little as ONE day.
Of course, I can’t promise returns or shield you from financial downturns.
But since we’re only in the market a short time (one day/overnight), we can “sidestep” most of the market-warping news surrounding the election.
The profits and performance shown are not typical, we make no future earnings claims, and you may lose money. From 5/19/22 through 9/10/24, the average win rate is 73.8%. The average return was 6.6% over a 6 day average hold time, the average winner was 28.9%. All examples based on $2,500 starting stake unless otherwise stated.
