Bull put spread

[.sigma]

So I was thinking about a credit spread on GRWG.
But there is hardly any OI or Volume except for the 40 strike.
Would that imply no spreads being held on that stock?

Another stock up 588% since July.. idk man, you got some guts going long a stock up that much in such a short time. I'm more of a contrarian minded man, but to each his own.

OI measures that individual leg, not spread. But yes you dont want to trade any strike that has less than 100 OI, I prefer to see 500+

 

[.sigma]

I agree with that.

I was hoping to capitalize on a successful launch,quickly

IMO, stay away from binary bets like this. Once you are more advanced then I'd say trade earnings plays and event-driven type news.

 

[mac]

Another stock up 588% since July.. idk man, you got some guts going long a stock up that much in such a short time. I'm more of a contrarian minded man, but to each his own.

OI measures that individual leg, not spread. But yes you dont want to trade any strike that has less than 100 OI, I prefer to see 500+

Since were in an uptrend..I realize the stock is up big...isn’t this the right situation for a bull credit spread? If the stock goes up....all is well.

 

[.sigma]

Since were in an uptrend..I realize the stock is up big...isn’t this the right situation for a bull credit spread? If the stock goes up....all is well.

Yes, a bull put spread is a bullish trade, if the stock goes up, most likely your spread will rise in value. But if you are gunning for a price rise relatively quickly you're better off trading the bull call spread instead. The spread is initiated for a debit and your risk/reward will most likely be better than the bull put spread. When you sell credit spreads, its more of a volatility trade than a directional trade, although direction of course plays a part. But debit vertical spreads are more appropriate for price direction plays.

And I was mentioning the way my mind thinks. Ever since I started trading 10 years ago I've always been a contrarian. Meaning I buy stocks that are going down, not up.

For example, lets say a stock is in a downtrend, i'll look for a spot to buy in (buy a call spread or sell a put spread) when i think its hit a temporary bottom. Its hard for me to get long stocks that have been bullish for awhile (uptrending). I know that sounds counter to logic but its how contrarian traders minds react to market movement.

 

[mac]

Makes sense... thanks, Gonna look into those types of spreads also.
I learn something new everyday.

 

[.sigma]

Makes sense... thanks, Gonna look into those types of spreads also.
I learn something new everyday.

remember, all spreads are interconnected.. so understanding one type of spread will make you understand other spreads. It’s essential to know this when trading options, it’ll give you a much better viewpoint. Study up on synthetics.