consistent income

So the next question is how effective is a bull put spread. Can someone offer a real life example of:

Actual max lost from a bull put spread trade when the trade gone real bad
 
If any of you have ever read Market Wizards the option trader they interview made most of his money off of buying butterflies and then purchasing deep OTM calls and puts for protection against a huge move against his butterfly......seems like this would be a pretty good stratagy to focus on but maybe not.
 
Quote from mark trader:

So the next question is how effective is a bull put spread. Can someone offer a real life example of:

Actual max lost from a bull put spread trade when the trade gone real bad
More...

The actual max loss is equal to the difference between the strikes less premium received. This is in fantasy world as well as real world!
 
answered you this allready: you just exercise the put you are long or you sell the stock and sell the put.
Get yourself a few good books on options, it's obvious you don't get it, that's not a disgrace, but time to do something about that.
 
Quote from youngtrader:

If any of you have ever read Market Wizards the option trader they interview made most of his money off of buying butterflies and then purchasing deep OTM calls and puts for protection against a huge move against his butterfly......seems like this would be a pretty good stratagy to focus on but maybe not.
More...

Very commission intensive. Hedging the upside?
 
I can see someone using this in a highly volatile market -- protects against the rollercoaster moves.

But I think there are better methods.
 
Just a suggestion. Get yourself an autotrader program and experiment with strategies that you like. I'd dare say that after about a month or so you'll find a profile/script or two that makes you happy. Then shift about $30k into an active account and study your results. I THINK YOU MIGHT ENJOY THE EXPERIMENT!

Also, spend a few bucks on some reading materials to help you reinforce YOUR personal theories on trading. Become an expert on what you like and how you trade. Good luck and happy trading! :)


Quote from mark trader:

I have $50K in savings and want to use this money to generate a consistent monthly income with low risk.

I started reading about various options strategies and am thinking perhaps selling puts would be the best strategy.

Would anyone mind sharing what has been the most profitable and consistent strategy to generate monthly income? and what level of monthly income can I expect using $50K?
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