≈ Keep it in your pocket. ≈
We’ve seen some questions in the Clubhouse regarding how to profit with options. Because they are multidimensional beings, and also because there are many possible strategies out there, new students find it hard to pinpoint exactly how profits are made.
When you enter an options trade, you are either a buyer or a seller. Even in more complex strategies involving, say, four options contracts, if you incur in a *net debit* to enter the position, you are a buyer (you are in a long position). On the other hand, if you incur in a *net credit*, you are a seller (you are in a short position).
So how do options buyers profit?
Profiting with options as a buyer: To profit as an options buyer, you must buy low and sell high.
This is as simple as it gets. It doesn’t matter if you are buying a single call, a single put or entering a Debit Condor. If you enter the position with a net debit of $1, for example, the only way to exit this position with a profit is if you sell the contract back for more than $1.
You can download and print the flashcard HERE.
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Profiting with options as a buyer
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This action plan is meant as an introduction to both Tackle Trading and trading itself. You won’t learn about options or strike prices in this guide. Rather, this plan focuses on helping lay a foundation for the mentality of trading, including finding your why of trading, the discipline it requires, and the like. Let’s begin!
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