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so i got lucky then is what ur saying?

loss of losinga greater amount of youe debit. in ky case $200 vs $36

im not saying i legged into my trade, but im saying that maybe if you enter a spread with a highly favourable payout, you get better entry points. still curious how i got in at less than market value on nov 4. if anyone has an explanation thayd hw great.

i agree it is hard, but i found it odd or extremely lucky on my recent baba trade. i put a debit spread on for a 36 debit with a spread of 103/104. 103 was at 2.28 and 104 was at 1.91. according to the charts, the 103 never even hit 2.28. any explanation on how this happened? im curious

yeah but theres more risk no? i dont even know how i got my contract so cheap to begin withm 2.28? i think it was trading at high 3's

UPDATE BABA earnings play debit:$36 closed 103/104 debit callspread @$50. profit: $13 per lot (36%)

i did a debit call spread on this. made 36%, but i wisb i just bougjt the call instead. I believe i got the debit a lot less than what it was trading at. 103/104 bull call 103 @2.28 and 104@ 1.92 ish spread cost $36 per lot. closed it for $50. time: 3 days any suggestions on how i couldve...

theres always money in debit spreads or tight control long put/calls on earnings plays. but realistically the chance of success is like 25%

well, i dont think you need to predict the market. if you believe in the efficient.market. theory then playing probabilities would be your best bet and having appropriate win:loss rewards.

bout 103/104 debit call spread. has about 40% chance of success. net return 0.70%.

good at scalping the legs? if these have close to 100% being right, and youre making 5-10 per after commission, this can add up.

dont you just use the standard deviation? for example, if your goal is to collect credit of a put with a strike at 100, you need calculate thr prpbability that an underlying will remain above the $100 price point for that time. to do this, the simplest formula is the standard deviation formula...

or will die trying nov 2 earnings nov 4 price at time: $100-101ish BABA -debit call spread long 103 nov 28 short 104 nov 28 (0.25 std) days to ex: 25 probability: 40% debit:$36 max gain:$64 close at: $50-54 ROC: 50% note: picked debit that is 50-60% of max credit. if probabilities play out...

thanks i just called them. kind of confusing with it buying and selling etc

bought a bull debit spread of baba 103/104 for$36 i want to close this position, on the app it says "buy"/sell bear call spread im not sure which to pick. if i click buy, it shows the action I want (sell 103 buy 104) , but do I do a negative limit order to receive credit or do a positive...

thanks for the input, really appreciate it. you should also look up don johnson, i feel like its the most similar to options trading.

wouldnt credit spreads be statistically better than debit positions by being more safe and consistent? for example, if you use pure probabilities to develop an assumption, at 1STD you generally have 84% chance of success and 16% chance of loss. so if you cap your losses at 50 dollar spreads...

so wha so what other conditions do you suggest looking at?

can you explain? are saying that there are other factors to consider, other than the stats behind it?

for debit spreads with the same example up top, you need to sell a 0.25 otm call and buy a cal 1.00 away from that strike. to profit, you need to make the purchase at at most 0.39. sell 14.00 buy 13.00 call so whcih do you think is better, the credit or the debit?