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Stock Market Options Trading

102: Best Options Strategy For Small Accounts and Beginners

Nov 16, 2023
The podcast discusses the best options strategy for small accounts and beginners, focusing on trading put credit spreads as a stock market insurance business. It compares options trading to car insurance, highlighting risk management strategies. The use of put credit spreads as insurance and understanding insurance contracts and deductibles in options trading are also explored.
19:54

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Quick takeaways

  • The put credit spread is a risk-defined strategy that is considered the best option strategy for beginners and those with small accounts.
  • Trading put credit spreads can be likened to running a stock market insurance company, providing a risk-defined approach that minimizes losses and requires less capital.

Deep dives

The Best Option Strategy for Beginners and Small Accounts

The put credit spread is considered the best option strategy for beginners and those with small accounts. This strategy is risk-defined, meaning the maximum potential loss and profit are known. It can be traded with as little as $100 and is easily scalable to larger accounts. Put credit spreads offer flexibility in trading durations, allowing traders to choose between fast-moving or slow-moving spreads based on their timeframe and preferences.

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