Exploring Changes in Credit Spreads and Market Opportunities

Credit Spreads How the market has changed!

AGENDA How has the market changed for the better for the retail investor? What are the best ways to take advantage of today s environment? Looking at DTE and determining when to sell. Looking at spread width. Which is the best for your method? An analysis of commissions and the impact on ROI. Putting it all together. Aeromir Credit Spread Service.

How have the markets changed and made the trading environment better for retail option traders? Commissions are the biggest change over the past 20 years. Regardless of where we came from, prices are way down. Introduction of weekly options. Smaller spread widths as small as $.50 Penny increments on many options instead of $.05

Taking advantage of today s trading environment! With low to no commissions as well as small spread widths, you could trade a credit spread with as little as $50. With weekly and intra-week expirations (SPX,SPY, NDX) having 3 4 weekly expirations, you can turn your capital over more frequently and compound at a much faster rate than when there were only monthly expirations. Technology has provided resources not available years ago including: Skype and Slack for community, OptionVue and ONE for analysis, Youtube and free online webinars for free education. Conclusion: This is a much better environment and much more inclusive for the smaller trader while the large account trader also benefits as well.

Looking at Days to Expiration (DTE) and how decay works. Most traders regardless of experience level don t realize that a basic option chain can show you current time decay of any spread wtih all variables staying the same. Unfortunately there is no software (other than excel) that shows True decay that the market is projecting for any option spread. Current models only show theoretical decay based on models.

Determining Which Spread Width to Use First you must determine your goals for the trade. Misconceptions regarding width. For example the naked put. Should you consider greeks or how do the spreads react to bad price action? How do the spreads react when price moves in your favor? If your goal is pure ROI based on risk, shorter width spreads provide better ROI.

Commission Impact to ROI and Broker Options. While commissions have come down, we do have many choices when it comes to commissions. Zero Option Commissions: Robinhood only current choice for small accounts. Worst platform and recent issues. Firstrade Securities Great platform and free tools. Requires $10k to trade spreads. Pass thru exchange fees Webull - ?? Still waiting for level 3 options trading. Fixed Price Unlimited Trading Tradier - Cost depends on which trading platform you use. Most brokers: $.65/contract Etrade offers $.50 if you do 30 trades a month! Tastyworks: $1.00 for opening the trade only. Best if you typically close a trade then the average is $.50. $.65 VS $0 in and out on a 1 wide = 2.6% to cover commissions.

Putting it all together! How are you going to choose your credit spreads? What about trading other structures like Flys and Condors? When to exit? Partial or full amount? Do you have to be active and watch it due to gamma? Should you diversify? Call and put spreads? What DTE or mix? Shorter terms provide great returns while allowing you to be in cash for part of the week!!

Putting it all together! My Robinhood Test. Robinhoods trading platform online and app are terrible bare bones. Do not expect much! Use Thinkorswim or other platform to determine what to trade and the price. Then execute it on Robinhood. Robinhood does not allow 0 DTE trades! Robinhood will pass along exchange fees but does not itemize them. 100% winners* using a combination of spreads, flys and Iron Condors. You must be in front of the computer as prices can move quickly and thus turn a winning trade into a losing trade. Have closing orders in . Don t be a dick for a tick!! You can scalp price movement to make a solid percentage. Works great with Flys and Iron Condors.

Credit Spread Service through Aeromir! Objective is based on what the community wants, but we have very high interest. Provide credit spread ideas from 8 dte to 2 dte. Ideas will also include some flys and iron condors but these are best for Robinhood due to the number of legs in and out x commissions. (You have to over come 8 x .65 = $5.20) Have a very active Slack group to encourage sharing ideas for possible trades. Exit approach would be to gain 2% - 4% minimum per week for profits based on commission structure. Exit position for a loss no later than hitting the short strike. If a position is near stop by the close with days left, we will exit to eliminate gap risk. Take into consideration market risk which currently is extremely high by every measure.

Service Continue! If you have interest in participating, please email me at mschwartz00@gmail.com. Please provide your thoughts as to what you want to get out of the service. Trade ideas , Slack community, once or twice a month webinar, trades based on commission structure?