Comments by "" (@money2024) on "Option Trading For Beginners - Using Debit Spreads u0026 More | Robinhood Strategies" video.

  1. Finally got approved for options spreads myself. Going to be making some videos about it soon if anybody is interested. From one beginner to another. Maybe we can both learn something together 👍
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  2. A put credit spread - you're getting paid the difference in premiums. You sell a strike price above the one you bought, securing the difference in premiums. You want the price to go up A call debit spread - you pay the difference between the premiums (unlike a credit spread, where you get paid that amount). You're buying the more expensive premium, and selling a cheaper premium. Your profit on this one is the difference of the two strike prices you chose x100 minus what you paid (the difference of the two premiums). You also want this one to go up
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  3. You could do either, let it expire or get out early. As the spread between your premiums widens, you make more money. You're making money on the spread. The spread widens as it goes more In The Money. So essentially, if your spread went from OTM, and then tomorrow it's ITM, the spread will be wider and you can get out by buying back the premium you sold, and selling the premium you bought. You make the difference of the difference of premiums (yes, sounds confusing). I'll give an example. Say you bought a call for $0.30 at $35 strike, and sold a call for $0.20 at $36. If the stock moved and now your premiums are worth $0.58 at $35 and $0.42 at $36, you can get out and secure the difference of the two. ($0.30 - $0.20 = $0.10 but when you got out it was now $0.58 - $0.42 = $0.16. Now you subtract the two and that's profit. $0.16 - $0.10 = $0.06, which everything is x100, so that's $6.00. If you waited until expiration, your potential would have been $10 profit (if the stock stayed in the profitable range), but you only get $6 profit because you didn't want until expiration. But it's still profit, and you might pull out early like this if you're worried the stock will make a big move in the wrong direction, and you can secure some profits before it goes downhill
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