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Advantages of Trading Option Spreads versus Directional Trades

When you buy a call option, the underlying stock must increase in price in order to profit from the call purchase. And at option expiration the underlying stock must increase above strike price of the option or you will incur a 100% loss of the option premium.

Option spread trades, however, can profit if the underlying stock is up, down or flat at option expiration giving option spreads a big advantage over directional trades.

In the video below learn how Chuck Hughes produced over $1.9 million in actual closed trade profits over the last three years trading option spreads
 

Option Trading Videos

In today's video Chuck will explore the option trade orders he uses to increase the profit potential for option trades.

The type of option order you use to enter and exit option and option spread trades can make a big difference in your option trade profitability. This is especially true for trading option spreads. Learn how option spread orders helped produce an average return of 98% for the option spread portfolio below.

The Best Way to Trade Options

When you purchase an option you need to have an option strategy. Options are considered a wasting asset due to the time decay characteristics of options. Out-of-the-money options consist of only time value. At option expiration options lose all time value. Buying at-the-money or out-of-the-money options is very speculative and there is a high probability that these type of options will expire worthless resulting in a 100% loss.

Due to the time decay of options, Chuck maximizes the intrinsic value and minimize the time value of an option when he buy's options.

In this video you will learn a simple option trading strategy and formula that will help you reduce the negative effects of option time decay. This technique has good profit potential and at the same time can greatly reduce the risk of option investing and increase your percentage of winning trades.

Please contact us for more information on Chuck's Option Trading Seminars!

Futures trading involves high risks with the potential for substantial losses. Hypothetical performance results have many inherent limitations, some of which are described as follows. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. there are numerous other factors related to the markets related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. Option and stock investing involves risk and is not suitable for all investors. Only invest money you can afford to lose in stocks and options. Past performance does not guarantee future results. The Chuck Hughes Inner Circle Advisory trade record does not represent actual investment results. Trade examples are simulated and have certain limitations. Simulated results do not represent actual trading. Since the trades have not been executed, the results may have under or over compensated for the impact, if any, of certain market factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.