Index Spread Options Trading - It's a Win Win !!!!!

I am an active trader of option credit spreads on the RUT broad based stock indexe. I am very conservative and only enter into trades that have a very high probability of being profitable. I share all my trades with subscribers to my advisory service.

My purpose is to make it EASY and SAFE for subscribers build wealth using the power of options. I want to help subscribers avoid the painful mistakes most beginning traders (and many experienced traders) make. Subscribers who just follow my Trade Alerts can earn a very consistent monthly return. Once a new subscriber uses my service for a 60 day free trial period, they will find it to be the most easy and profitable way to build wealth they’ve ever discovered. That’s why I want all new subscribers to try it ABSOLUTELY FREE for 60 days. New subscribers immediately receive all my active trades. They can start investing right away, or just follow my trades "on paper" for 60 days. If they aren’t convinced this Trading Strategy is the safest, easiest way to build wealth, they can simply ask me to cancel their subscription, and they won't be charged a dime.

One final note: While I show subscribers how to make consistent monthly profits with options, I also teach something more important. And that is how to effectively manage money and risk so when a trade is at risk, losses are kept to an absolute minimum.

An option credit spread is a limited risk option trade involving the simultaneous purchase and sale of two differing option contracts on the same Index, i.e. the RUT. This produces an immediate cash credit in your trading account. A profit is realized in a credit spread position if the index moves in the direction anticipated, remains the same and even if under appropriate circumstances the index moves adversely to your position.

Benefits of My Service and Credit Spread Trading

• My credit trades have a 90% probability of expiring worthless when filled.
• 1 Credit Spread Trade Alert each month. This credit spread trade can profit in any type of market.
• The majority of time we just make our trade, collect our credit and wait for the next month. This is not a day trading system. There is no need to monitor the market and your active trades all day long in front of the computer screen. In fact it's really a very boring trading system.
• Paper trading is the best way to learn this option strategy. It's all free with OX and my 60 day trial.
• The RUT Index is not subject to the same wild swings as individual stocks.
• With my Iron Condor trades you get double the credit but only have one margin side at risk.
• You want your credit spread trades to expire worthless but you can always buy them back for way less than you sold them for.
• Your trading capital is only used to support margin requirements. Most option brokers allow you to invest your trading capital and use it as collateral for spread trading. This way you can earn 2 returns with the same capital.

Please visit my website. You can see my actual performance results of all trades for the last 12 months and the current YTD return which is amazing. My website is over 25 pages and full of content that covers all aspects of this trading strategy.

Option Spread Trading

Option trading all comes down to probability of profit. Statistically, option sellers always have a better chance of profiting. It's true that when you sell options your profit is limited, but your chances of walking away with that profit are high. The reverse is true for option buyers. Their potential profit is limitless, but the odds of achieving that profit are very small, especially with out-of-the-money options.

Why not put the odds of success on your side and learn how to become a smart option seller? Naked (uncovered) option selling entails unlimited risk and limited profit, but there is a strategy of option selling that has limited risk as well as limited profit. It's called a credit spread. In a credit spread, you sell an option and buy a cheaper option at the same time to limit your risk. Since you are selling a more expensive option than you are buying, you get to take an initial credit into your account. As long as you implement the trade as a spread, you will never be exposed to unlimited loss, as is the case with naked option selling.

Credit spreads come in two types -- the bear call spread and the bull put spread. A credit spread is always used with either all calls or all puts and within the same expiration month. A call credit spread consists of selling a more-expensive, lower-strike call, and buying a less-expensive, higher-strike call. A bull put spread consists of selling a more-expensive, higher-strike put and buying a less-expensive, lower-strike put. The best outcome of a credit spread is to have all the strikes expire worthless so you can keep the entire premium you collected at the beginning. Credit spreads should be initiated using the two closest months to expiration. This is when time decay starts to accelerate, and it gives the underlying security less chance to make a move against the position.

Credit spreads can be used with individual stocks, futures options, or indices such as the NDX, RUT, SPX Standard & Poor's 500, and so on. If you are playing the stock market, credit spreads are preferable with an index such as the SPX, NDX or RUT options because there's less chance of a gap move than there is with many individual stocks.

Credit spread trading is a simple, safe, and stress-free type of trade that does not require a great deal of monitoring. You just place the trade, collect the credit, and wait for the options premiums to decrease or expire worthless. And if the underlying security starts to move against your position, there's no need to worry; your loss is limited, no matter how far the security might move. Plus, you can always unwind the spread at a small loss before expiration occurs.

Options lose all of their time premium by expiration, which is referred to as time decay. Because they have no intrinsic value, out-of-the-money options expire worthless.

New Bull Put Trades expiring in March Posted to Members Page

The market rose again in February and our second Bull Put trades of 2011 expired worthless. The markets are rising now because 1st quarter earnings are exceeding expectations. These positive earnings are bringing investors back into the market causing stock prices to rise. We must continue to trade on the PUT side while this bull market continues.

New Bull Put Trades expiring in February Posted to Members Page

The market rose again in January and our first Bull Put trades of 2011 expired worthless. There is no indication that the markets will not continue to rise in February so we are going to be conservative again and trade another Bull Put spread.

New Bull Put Trades Expiring in Jan 2011 posted to the Members Page

The market is rising again so the call side is too risky. We would have had to close out Bear Call trades a lot these past 4 months if Iron Condor trades were completed. The Bull Put trades are providing a decent monthly return so I am going to start off 2011 is another conservative Bull Put Trade. In 2010 these Bull Put trades generated a 33% annual return. My goal is to repeat this performance in 2011.

New Bull Put Trades Expiring in December 2010 posted to the Members Page

The market is still volatile dropping and rising on international news events. One new stock offering also allowed the markets to recover nicely last week. This time of the year is always fun to trade credit spread Put options because the markets rise in December. So I am continuing the trend with a new RUT Bull Put trade to finish the year.

New Bull Put Trades Expiring in November 2010 posted to the Members Page

The market continues to rise month after month. Our RUT Bull Put trades have now expired worthless 5 months in a row. If we have completed Iron Condor trades our Bear Call trades would have been at risk and closed out early for a loss. By trading just one side we are still averaging a decent monthly return. When most CDs and fixed investments are earning just 3%-5% for a year we are earning 5% to 8% monthly. This translates to a very high annual return.