There are a lot of options trading strategies out there, and not all are created equally. If your goal is to make money trading options, you will need the best options trading strategy. David Jaffee of BestStockStrategy.com has taught more than 1,500 students how to win up to 98% of their trades by implementing the right strategy and you could be next. First, you must decide between buying options or selling options. There are plenty of cautionary tales about traders trading too big or too often and losing everything.
Choose the right trading strategy can help you balance your risk and reward to maximize profitability. While buying options has a defined risk, the probability of profit is relatively low.Options traders have a greater probability of profit when selling options. Buying options is similar to playing the lottery or gambling, but selling options enables you to act like the casino or insurance company.
In fact, selling option premium is the best strategy to win almost every trade. By selling option premium, you can predictably and consistently make money in the stock market. Next, you can refine your strategy. David Jaffee recommends selling option premium to all of his students, specifically selling vertical credit spreads and naked puts. Selling naked puts is a simple strategy that can maximize the premium received and protect against trading too many contracts (although it also has tail-risk and uses up a lot of buying power).
For many traders, selling vertical credit spreads may be more capital efficient. Vertical credit spreads have a defined risk, so you know the defined maximum loss when entering the trade. David Jaffee recommends against a variety of options trading strategies that some courses may promote, including straddles and iron condors, because they can lead to losses and significant mental stress.
In addition to teaching a great options trading strategy, David Jaffee provides information on alternative strategies that may be beneficial in specific situations. You can learn about the wheel strategy and when you should trade it, when to sell covered calls, and when to use the collar option strategy. If you want to see better results when trading, make sure you are using the best options trading strategy. Visit BestStockStrategy.com to learn more about selling option premium and becoming a profitable trader.