SteadyOptions is an options trading forum where you can find solutions from top options traders. TRY IT FREE!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

cwelsh

Welcome to Simple Spreads

Recommended Posts

What are Simple Spreads?

One of the biggest critiques of Steady Options relates to the amount of time the trades take and the difficulty understanding them.  We have listened to our members and are creating a new strategy for the space called “Simple Spreads.”


Simple Spreads is just that – much simpler trades, that take less management, less time to enter, and with performance that is easier to understand.  We have added two new contributors, Marcus Morriss and Parker Edmiston who will assist with the service.  Christopher Welsh will also be contributing.


Marcus and Parker are the ideal leads for the new strategy as they each have been actively trading the Simple Option strategies in their own personal account, for profit, for over a year.  In a coming post, they will each publish the last year of trades and the results from each.  As with most Steady Options strategies, the results speak for themselves.


The Simple Options Service highlights:

  • 4 – 6 trades per month
  • Trades which are not as time sensitive as the core Steady Options strategy
  • Ideal for smaller accounts
  • Targets trades with a large margin of safety with an average profit target of 5% to 10% per trade
  • Trades that naturally hedge against each other (e.g. profit by markets moving in different directions)

 

The Strategy

Simple Options is made up of two “core” trades, a leveraged covered calls (our version of calendar spreads) and vertical spreads.  Due to the higher risk of the vertical put spreads, they will make up a smaller percentage of the committed capital.  As additional risk management, large portions of the strategy will be in cash at any given time (e.g. you will never be fully invested).
 

The model portfolio is $25,000. The Strategy is structured to run on accounts of $25,000 and greater, but many (if not most) of the trades will work on smaller accounts.


Leveraged Covered Calls (2x to 4x the position size of the Vertical Put Spreads) / Also known as Diagonal Spreads

  • Step 1 – Identify a stock that meets our metrics and setup
  • Step 2 – Purchase a deep in the money long dated call (near 90 delta or higher) on an identified stock
  • Step 3 – Sell a call against the deep in the money long dated call 1-3 weeks out


Here is how a typical setup would look like:

image.png
 

Vertical Put Spreads (less committed capital than the Leveraged Covered Calls)

  • Step 1 – Identify a stock that meets our metrics and setup
  • Step 2 – Sell a vertical put spread

 

Why Simple Spreads?

There are dozens of services that identify covered calls and vertical put spreads to trade.  We’re different in that (a) by pairing it with vertical put spreads we reduce market risk as the two trades profit in different market conditions, (b) by using leveraged covered calls, we increase potential returns, widen our profit window, and reduce the amount of capital necessary for such trades when compared to traditional covered call spreads, and (c) we use more than just simple “filters” to pick our stocks, using a combination of fundamental analysis, technical analysis, and momentum in picking trades.

The forums will also provide an ideal location for new options traders to begin grasping and trading both introductory and more complex options strategies without having to be tethered to a computer.

Where can you find the trade and the trade discussions?

Share this post


Link to post
Share on other sites

@Tamas as I mentioned, at this point it is running as pilot, open to all paying members for the next few weeks. Only current members (of any existing service) can have access at this point. It will be officially launched some time in February.

Share this post


Link to post
Share on other sites

This sounds very interesting.  Thanks for sharing.

Are you diagonals and put verticals on the same underlying?   If so, is this mostly a directional play (leveraged deltas)?   Would love to see some example setups and risk graphs when you have time.

  

 

Share this post


Link to post
Share on other sites
23 minutes ago, FrankTheTank said:

This sounds very interesting.  Thanks for sharing.

Are you diagonals and put verticals on the same underlying?   If so, is this mostly a directional play (leveraged deltas)?   Would love to see some example setups and risk graphs when you have time.

  

 

First trade and trade discussion posted on the forums.

Share this post


Link to post
Share on other sites
1 hour ago, Dennis Wood said:

Example setups and risk graphs are for current paying members only 😂

Hard to pay money for something until you know what that something is but I will check it out. 

1 hour ago, Kim said:

First trade and trade discussion posted on the forums.

Thanks will check it out. 

Edited by FrankTheTank

Share this post


Link to post
Share on other sites
19 hours ago, FrankTheTank said:

This sounds very interesting.  Thanks for sharing.

Are you diagonals and put verticals on the same underlying?   If so, is this mostly a directional play (leveraged deltas)?   Would love to see some example setups and risk graphs when you have time.

  

 

I can share all of the setups for the 2020 trades I did.  I will post them next week.

Share this post


Link to post
Share on other sites
On 1/6/2021 at 5:44 PM, Dennis Wood said:

Example setups and risk graphs are for current paying members only 😂

It has always been our policy that paying members get the initial free access to any new service. It's our way to thank them for their loyalty. Subscribe to any of our services - and you will get access to SS forums as well.

Share this post


Link to post
Share on other sites
On 1/9/2021 at 6:41 AM, Kim said:

It has always been our policy that paying members get the initial free access to any new service. It's our way to thank them for their loyalty. Subscribe to any of our services - and you will get access to SS forums as well.

Understood, but not willing to even share a sample trade to demonstrate the strategy and structure of it?  Very odd.

Share this post


Link to post
Share on other sites
1 hour ago, Dennis Wood said:

Understood, but not willing to even share a sample trade to demonstrate the strategy and structure of it?  Very odd.

From the first post:

 

Leveraged Covered Calls (2x to 4x the position size of the Vertical Put Spreads) / Also known as Diagonal Spreads

Step 1 – Identify a stock that meets our metrics and setup

Step 2 – Purchase a deep in the money long dated call (near 90 delta or higher) on an identified stock

Step 3 – Sell a call against the deep in the money long dated call 1-3 weeks out

Looks pretty clear to me.

In any case, everyone will have a chance to have a 10 day free trial.

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy and free!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.