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Morning Mailbag: How to control risk in a Credit Spread in Thinkorswim (TOS)

February 14, 2015

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Welcome back to another edition of the Morning Mailbag!

In this edition, Coach T answers a question from a student regarding the risk management of a credit spread (Bear Call Spread) in Thinkorswim (TOS).

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9 Replies to “Morning Mailbag: How to control risk in a Credit Spread in Thinkorswim (TOS)”

  1. Paul Seward says:

    Great video. I followed most of that. What I didn’t follow was how you
    came up with the entry stop at $1.00 and exit stop at 1.50

  2. Colin Disch says:

    Great Question Christian. Thanks for the explanation Tim!

  3. Ming Bai says:

    Thank you Coach D for the video, it is really helpful. I also did not get that how did you come up with the stop at $1.5 based on the risk graph and $50 assumed risk. And after creating/sending the April order with stop loss, is the original March order (575/580) automatically removed? Please advise.

  4. Ming Bai says:

    Sorry about the typo. I meant Coach T.

  5. Thanks Tim!!! Great advice on how to plan and manage the spreads. It was so good that I can only beg for more videos like this but tackling the other strategies that are thought in the courses Cash Flow Options, Spread Trader and Elite Options…. you are victim of your own success!!! 🙂

  6. Hi Tim, I just watched your video on credit spreads. Thanks a lot for sharing this! I do have the same questions as the folks above, about how you came up with the buy back at 1.5-1.8. I suppose it has to do with the risk you determined of $50 or $80 per trade?
    I am new to credit spreads, just now learning all the rules. If you can share more videos on that, for the newbies, that would be awesome! Thank you very much in advance!!!

  7. Christian Ljungbeck says:

    Awesome Tim. Thanks! I have mostly just done the next month out, but maybe I should look into longer term trades sometimes.

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