A potentially lower-risk way to buy options

You know I love options. I love everything about them. Opportunities for crazy gains... Risk management... Hedging abilities… Name a way you want to bet on a stock and there is an options strategy to go with it.  Personally, my favorite is betting on which direction the stock is likely going to go next. If all my indicators suggest the stock will go up, then I want to buy calls. If things like they are going lower, then I want to buy puts. The beauty of buying options is that you have virtually unlimited amount you can make on the trade. That is appealing at first glance (who doesn’t want to make “unlimited” upside afterall?) but how often does that really happen when you buy options? It is extremely rare. The sobering fact is that more often than not, the buyer of options loses on the trade and that is what forces me to want to be a seller of options in a majority of my trades. The seller has the upper hand in the options world, and I like stacking whatever little advantage I can in my favor when trading. But, what if you could combine my favorite way to trade (buying options) with what gives me an edge in the market (selling options)? That is what I want to talk to you about today. How to combine both buying an option and selling one – both in the same trade. This is called buying a spread (or vertical). If you learn how to do this effectively, I think it will be a game changer for your options career. Let me show you a recent example of this with a trade I just wrapped up with members of Wall Street Bookie. Looking at all the information I had on DOCU last week going into earnings, I thought the odds favored the stock jumping after that event. Now, there are a few ways I could play this: - Buy DOCU stock. This takes a lot of capital to buy enough stock to make me excited about the trade. Also, if I am wrong, the stock could collapse and I could wind up with a bigger loss than I expect – this is not the play for me. - Buy call options on DOCU. This is how I typically like to approach trading when I think I am right on the direction. There is unlimited upside if I am right and I have a limit to my losses if I am wrong (I can only lose 100% of what I bet). The problem here is that the options are so expensive because of earnings. As you can see in the table below the $43 call options were trading for $3.80 at the time. That means I need to see DOCU jump about $4 the next day (roughly 10%) just to break even – again, this is not the play for me. - Buy a call spread. With this strategy, I will still buy the $43 call option for $3.80, but I am also going to sell an option that is much riskier to someone else. In this case, the $48 call option for $1.80. This makes the net amount I have at risk only $2 instead of $3.80 per contract – this is the ideal trade for me. (option chain on DOCU before earnings announcement) So, like I always do, I told my [Wall Street Bookie members]( about my plan early in the day and then I took the trade (My actual note to “Bookie” members) Here is what the trade looks like when it is setup in my account. Note: I bought the more expensive contract and sold the cheaper one. This is the exact opposite of “selling a spread” is (which is a strategy I use a lot). Now, here is why I made this trade. If I only bought the call options I would have had $3.80 of risk, but unlimited upside.  By selling the riskier option to someone else at the $48 strike price for $1.80 per contract, I was able to offset some of my cost in exchange for giving away the upside above $48. This lowered my risk in the trade to just $2 per contract instead of $3.80. I was still able to profit up to the $48 level (DOCU closed around $49 on the day after earnings, so I was very close!). If I only bought the calls, I would have made money on this trade but I would have take on nearly double the risk without having any more upside than I made with the spread trade I made. At the end of the day, I bought 10 contracts of the call spread for $2, so I had $2000 at risk on the trade. The next day, after earnings went in my favor, I closed out the trade for max profit of $5. This means I took a $2000 investment and turned it into $5000 the very next day. Not a bad thing to learn, right!? This is the kind of strategy I am teaching about every day in the [Wall Street Bookie]( program with Jason Bond. If you want access to our top ideas each day along with detailed live (and recorded) lessons on how we are setting up these types and trades and how we spot them, then this is the place for you. Learning to master the art of selling options in various different strategies is how you will get to the next level in your trading career. Stretch yourself a little. Get out of your comfort zone and learn new ways to trade that will open your eyes to a whole new world of opportunity. If you want to start your journey with Jason and I with [Wall Street Bookie](, then now is a perfect time to get started. We have a limited time [60% discounted offer]( – only our existing members I would love to teach you these types of strategies week after week – and believe it or not, it really isn't that hard to learn! I have been teaching people just like you for over a decade now and I know exactly how to cut down on your learning curve. So take the leap today!  If you like my Bullseye programs you will absolutely love taking your learning to the next level with Wall Street Bookie. 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