I am still studying these spread and im super confused about these things after watching your videos. someone please help me asap.
So i noticed that the underlying most of the time is not close to the spreads bid and ask .
When i trade a spread am i depending on the underlyings price or the spreads price at expiration ? next question
This break even price you talk about in your videos, are you talking about break even on the amount of money im risking aka my risk
or are you talking about a price i need to hit to cover some sort of loss before i start to profit. this is the most confusing part .
if i buy a spread and it goes up i expect to be profiting right away every tick it goes up. however you make it seem as if i do buy the spread, due to something i need the spread to cover some gap before i start profiting.
I dont understand what this break even price you talk about it. can you please explain in more detail and try to make it simple . someone ? please ?
Hi Kiskorass, I found these notes Darrell wrote in response to another’s question on spreads.
if you want to mirror the market then pick one whose breakeven distance is close to the market
if you expect a decent move and want no stop loss choose one close to floor/ceiling
Check out the video above and the spread scanner to help you
The breakeven distance is the difference between the spreads price and the underlying the scanner helps you eaisly find the spreads with the lowest be distance
How is it easy? not sure what you mean… Trading is not as hard as people make it but not as easy as we want it to be…
