Box spreads

#1

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 ?

#2

kiskorass, try this video here, it breaks it down in a simpler fashion to understand the questions you are asking:

#3

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…

I trade spreads often using the Elite strategy.

Darrell

#4

thanks guys i figured it out

#5

Hi kiskorass… Can you please share any information how you clarified your query and also provide some information

Thanks