Good Morning!

I had some free time over the weekend and thought I’d share with you all something I haven’t written about yet in this publication. We mostly share direct and active trading information during the week, but I want to take this time to discuss the cashflow strategy I employ each and every week.

These types of trades are called credit spreads and below is just a quick snap shot of a few trades from last week:

I focus primarily on “put credit spreads.” To explain them in the most simplest of ways sounds like this: “If a stock stays above a certain price that I choose, I get paid.”

More technically it looks a bit like this:

I sell a put and receive a net credit.

I buy the put below the put I sold and pay a net credit.

The difference between the credit and the debit is my potential profit.

Lets say I sell a put and collect $60. I buy a put and pay $35. The difference is $25. That $25 becomes my profit. I can do that 20 times in order to collect $500 in premiums.

Now… Let’s add to the example.

Let’s say the stock we are looking at is $100 per share.

We sell a put at $90 per share and we buy the lower put at $87.5 per share.

So to realize the profit we would simply need the stock to stay above $90 by the expiration date and we would realize the entire $500 of profit in this strategy.

How much money would this require?

In this scenario you would pledge $250 for each contract ($90 - 87.5 =$2.50). ($2.50 × 100 = $250). So to create $500 per week you’d need to dedicate $5000 to put credit spreads.

I use this as a strategy to work in the background while I am actively trading. It requires nothing but monitoring your trades.

Is it perfect? Of course not. All trades have ways that you can lose. If the stock prices goes below your agreed upon range you can certainly lose. That’s why we use our tools that we share with you every single day to help project the defined range for the week and set our strike prices accordingly.

We also try to set our prices on days where the stock is already down. We did this with both the COIN and META examples above.

Both of these trades expired harmlessly for me and silently added $1000+ to my account this week without the stress of active trading.

I will always use this strategy to generate cashflow that helps grow my account week by week. These are just 2 of the trades I made this week. I had many more of these spreads working in the background and accumulating value to grow my trading account.

Let me know by responding to this email if this is something you’d like me to spend more time covering.

If you are really interested I can even add it into the live alerts that I will be releasing to you all in the coming week.

I just need to know that this is of interest and I’ve got no problem putting in the work to bring you more clarity and transparent trades on this strategy.

Enjoy the day off before we get back to active trading tomorrow.

Talk to you then!

-Caleb Gregory