Effective Strategies for SPY and QQQ Options

I'm going to show you how to profitably trade SPY and QQQ options. This will be the single most important video you ever watch in your entire trading career. Now, to prove that I know what I'm talking about, let's take a look at the live account. This is one of my accounts that I show here on YouTube live, okay? Currently trading at $695,000. I put my money where my mouth is, so you're going to see exactly how I trade SPY and QQQ options. Currently, I'm up over 35K for the month. which is a 5.3% return, okay? So I'm averaging anywhere from 45 plus percent per year on my portfolio. And if you look at my profit and loss statement from the last three months alone, okay, you could see that I am up over $100,000 in net profit. These are trades that I closed. And my win-loss ratio is 93%. So I'm gonna show you exactly how to be profitable, not only profitable, but consistently profitable with a high win ratio because I do think that is very important. But before we get into it, if you do want my stocks and options plays directly in your inbox for free, click that first link down below in the description. If you have any questions throughout the video, feel free to comment down below. I answer all comments or you can message me directly on Instagram at itsryanhildrith and you could even see into my personal life and what I do with my profits. Okay. So let's go ahead and jump into it. Remember, this is not financial advice. This is just me sharing exactly how I've built wealth trading options in the stock market. Okay. So these are my four principles when trading SPY and QQQ. All right. Comes down to these four principles. Number one is understanding the overall macro environment. Are we in a bull market or are we in a bear market? You've probably heard the trend is your friend, and that is definitely the truth. You do not want to go against the trend. it'll make your trading much harder throughout your career. Number two is understanding the VIX. If you've never heard of the VIX, then you're gonna wanna watch this video because this is the single most important thing that I look at when trading options. Number three is understanding and identifying key levels on the chart, the relative strength index or the RSI, and Bollinger Bands. Those are just a couple indicators I use. I like to keep it simple and take a look at those when I am trading options. And number four, is choosing the right options strategy. I see too many people promoting on YouTube that you should buy options as a beginner. I don't think that's a good idea. When you're getting into options, selling options is going to be a better play because your win rates are gonna be much higher and you're gonna be able to trade the markets, understand how they move, get consistent profits, not blow up your account like most people, including me. I've blown up many accounts back in the day when I was buying options. And I'm going to show you exactly how to sell options if you don't know how. And we will go into some buying strategies because I think once you get more advanced, you could definitely start buying options. So understanding the macro environment. This is the single most important thing to learn. I didn't understand this prior to 2020 and it bit me in the butt. In 2020, during that crash, I lost six figures because I didn't understand leverage and I didn't understand the macro environment. So we are currently in a lowering interest rate environment. This means that it's cheaper for businesses and consumers to borrow money and spend. So this affects SPY and QQQ because it's a conglomerate, right? It's an ETF full of many different companies, right? So there's no individual stock risk on SPY and QQQ, but there is macro risk. So economy, how is the economy performing? Are the interest rates going lower or higher? right? That's all going to affect SPY and QQQ. So more money is borrowed by the U S government via treasury bonds auctioned off by the federal reserve debt creates money. So the more debt that is issued, the more money that is created and the more money that is put into the market, this money plows into assets that appreciate such as stocks and real estate, because the people with that money, the wealthy do not want their dollars to be diminished because of inflation. They want to keep it. their dollars to be in an asset that's going to go up faster than inflation. All right. Not understanding this creates uncertainty and can leave you with big losses. So let's kind of look at exactly what I mean by that. So if we just look at QQQ, that's what I'm going to be looking at primarily today. QQQ. All right. If we go back to, let's just say, right, let's go back to 2020 or 2022. Okay. The macro environment, this is what was happening. Back in December of 2021, they announced, the Federal Reserve announced, they will be raising interest rates. five or six times in 2022 because of inflation, right? Gas prices were going up like crazy, eggs were going up like crazy. And when that happened, when they announced that, the market tanked. It tanked like 15% within one month, and then it continued to tank down back here in October of 2022, 36% on QQQ. SPY was down 25%. I prefer trading QQQ, it's a little bit more volatile, but you make more money trading it, okay, in the long run. And then right here, okay, there was a pivot right here. October of 2023, they announced that they would be lowering interest rates. And then the stock market rallied, okay? It rallied and it recovered. It recovered this level in January of 2024, recovered from the all-time high in 2022. And we've been making a lot of money ever since then, okay? So that is what I want you to understand when trading before even getting into it. You got to understand the product. You're not just trading a stock. You're not just trading an ETF. You're trading the economy, interest rates, right? So there's so many different factors, okay? Now, understanding the VIX. This is the next most important topic, okay? The VIX is the volatility index of the S&P 500. This is a fear index. It could literally tell you how much fear is in the market, okay? It measures... volatility on S&P 500 options. So when the VIX is high, options premiums are overpriced, right? Options are fear-based products. So when people are buying puts because they're scared of their stock going down, they're buying a fear-based product. They're buying insurance, right? And then there's day traders that buy puts and calls and they don't even understand that these things are overpriced. So when the fear subsides, these options contract. in premium. So a lot of the value is extracted out of there. And if you're buying options, you could lose a lot of money just from time decay, just from time passing by. Okay. So you want to be careful in trading options. Um, I have a full tutorial in my description on options. If you don't understand options, okay, there's a full tutorial. You need to watch that, um, first, but if you do understand options and you've been, you know, studying on the internet, then we're good. We can continue forward. All right. So When option premiums are overpriced, there's a lot of fear in the market. This gives you a key advantage when selling them, okay? You're selling overpriced options. Here's the key levels. 10 to 15, 25% of your portfolio can be allocated. That means there's like rarely, little to no fear in the market. 15 to 20 VIX means that there's some fear. So your portfolio can be 50% allocated, meaning you're invested 50% of your funds. And then if the VIX is above 20, 75 to 100% of your portfolio can be allocated. You want to take advantage of fear. Most people don't invest when there's high fear, but as an option seller, you want to be investing when there's a lot of fear. I mean, even Warren Buffett says, you know, be fearful when others are greedy, meaning when the VIX is near 10 and be greedy when others are fearful, meaning when the VIX is above 20. I wish he just said that instead. Just tell us about the VIX, Warren Buffett, right? So, and Warren Buffett sells options. He just doesn't talk about it. He does. They collect billions in options premium every year. You can look it up. But, so let's take a look at VIX, all right? And let me give you an example. August 5th, we had a huge sell-off in the markets, in the S&P 500 and overall in the stock market. And the VIX spiked up all the way to 67. Now, we hadn't seen this VIX spike this high since the crash in 2020, all right, when VIX went up to 97. So this was pretty rare, but I want you to look at QQQ, what happened on August when this happened, okay? When that happened here in August, we were trading here, and then boom, boom, boom, right? We just plummeted. We plummeted down, okay? That was a huge drop. And you could see that the VIX was... was spiking that whole way from July 17th all the way to August 5th. So we can go look at QQQ. This was July 17th right here, all the way to August 5th. Okay. So when VIX goes up, the market tends to go down most of the time. Okay. So with that being said, all right, that's usually when you take advantage and we'll kind of get into that. but first let's go ahead and talk about identifying key levels on the chart with rsi Bollinger Bands, and just support and resistance levels. So the RSI is a momentum oscillator that measures overbought and oversold conditions. If it's trading above 70, the stock is overbought. Trading below 30, the stock is oversold. And Bollinger Bands measure how drastic price changes are and the probabilities that the price will revert to the mean or revert to the average price. So let me kind of unravel what that means. So right here is the RSI. You could just go on Indicators, Trading View. Relative strength index, okay? And you're also gonna wanna pull up Bollinger Bands, all right? Select that, boom. RSI, so again, 70s here, 30s here. As you can see, we were overbought right here. And what happened? Well, eventually the market tanked, okay? So you have to be careful when we're overbought to not get into a long position because we could be on the brink of the market rolling over, all right? And that's exactly what happened. now when we're oversold as you can see qqq was right at 30 those are good conditions to either buy stock buy options or sell options right and as you can see right here we snap back up all right so that's the rsi now the bollinger bands what these means is these two lines are two standard deviations away from the average price meaning the stock is going to stay within these two lines 95 percent of the time and as you can see every time we pop out of the bollinger bands it sucks back in okay same up here it popped out of the top bollinger band sucked back in top sucked back in right and we're kind of at that moment where we broke the top right here and sucked back in so this is actually a good moment to start thinking about getting long all right so that's how to identify key levels now support and resistance is Not as important. I do like to draw some lines and stuff like that, but really the Bollinger Bands are going to be more important, okay? Because these are kind of the levels that the stock is usually going to stay between. So let's talk about choosing the right option strategy. When you're first trading options, you should not be buying them. You should be selling them via vertical spreads and cash secured puts. This ensures you're winning 80 to 90% of the time versus... losing 50 to 75% of the time with buying options and relying on stop losses. We're not going to use stop losses. That's not how we trade options. Only if you're selling them. If you're buying them, then sure. I mean, I don't use them because I know how to buy them right. And I'll show you exactly how to do that. Okay. So let's go ahead and jump into QQQ. And we're just going to place a trade. We're just going to go ahead and we're going to sell an option that's somewhere down here near this lower Bollinger Band. Okay, so as long as the stock stays above here, we're going to collect that full premium. And there's a 95% chance that it's most likely going to stay above that. So what I'm going to do, and that's at the 500 level. Interesting enough, the lower Bollinger Bands at 500. So we're going to go to Tasty Trade. We're going to log in trade and we're going to go to QQQ. All right. And let's take a look. We're gonna go 35 days out. This is an example of a small account strategy. So if you have $10,000 or less, you're gonna wanna do a vertical spread. So you're gonna go vertical, short put, okay? And we're gonna adjust this. We're gonna drag this to that 500 level and see how much premium we can collect. Perfect, that is actually where I want to go. Especially with a small account, you gotta be safe. All right, so we're gonna put the short put at 500, which is 26 delta, and then we're gonna put the buy put at 495, all right? So what that's doing, you're risking 500 bucks because it's five points wide. You're buying this, or you're selling this option, and you're buying this one. So that means if the stock goes below this, you're gonna be losing money here, but you're gonna be gaining enough money here to cover your loss past 500 bucks. So you could only lose It'll even tell you in TastyTrade, max loss 406 to make 94 bucks, okay? So that's about, you know, a 20% return, a little over 20%, all right, in 30 days. That's pretty good on your money, right? So that would be a trade that I would place. I would sell the 500, buy the 495 in this vertical spread, risk 400 to make 94, and your probability of profit is 75%, okay? So that's pretty good odds there. Now, if you have a big account, you would sell a cash secured put. So we're going to delete this leg and I would sell the 30 Delta. Okay. I would go closer in a small account. You want to go 25 Delta or less in a bigger account. You want to go 30 Delta. All right. And you're going to collect 695 bucks. And let's calculate the return there. 695 divided by 505. Oh, 505, there we go. It's about a 1.3% return in about a month, okay? So that's decent. Obviously, you can get higher returns trading individual stocks, but we're talking about QQQ and SPY, all right? So that's what I would do here. Pretty good return, 1.3%. So that's gonna annualize to close to 20%. for the year um annualized and compounded monthly all right so that is exactly what i would do there now if you are start getting good at this you start collecting premium you're like okay i like selling options i get a high probability of profit i'm making some money i'm getting comfortable now you can go ahead and try to buy options which i would only do on qqq in times like this when we are approaching that lower bollinger band because every time we do We snap back up and you can make a lot of money, okay? Now, it may take longer to recover, so I'm gonna show you exactly how I would do it. What I would do is I would go here. Let me just clear this trade. Go to the options chain and you're gonna go far out. You're gonna purchase LEAPs, Long-Term Equity Anticipation Securities, all right? LEAPs basically allow you to hold 100 shares, like controlling 100 shares, and you don't have to worry about time decay. Okay. Cause every time that every day that goes by, right. If we're, we're going to go 364 days out, December 19, 2025. If you want to be safe, go out to 2026. All right. Every day that goes by on these options. Okay. Um, let's look at the, yeah, this is the theta. All right. So every day that goes by on these particular options, you're losing like five bucks. You're losing five bucks a day, just in time decay. All right. That's why I sell options because time decay works in my favor, right? But if I wanted to buy options, this is how I would do it. I would go to the 70 Delta, which is going to be somewhere right here at the 494.78. So QQQ is trading at five, let's just say 510. You're purchasing the 494, which is down here. Okay. And that's going to cost you about 7,200 bucks, but you get to control a hundred shares. So That would have costed you $51,000, but now you get to control the same amount of shares for 7,000. So you're using leverage. You're getting leverage on your money. Okay. So I would purchase that one, the 494. All right. Which is actually, no, that's the 63 Delta. I would go up actually to the 70 Delta, which means where every dollar QQQ moves up, you're going to make 70 cents. Okay. So that's the 460. So on the chart, that's going to be your purchasing right. Here, which gives you the right to buy 100 shares at 460 by expiration, but you're not going to wait till expiration, okay? You're just going to hold this like you're holding shares. So let's just say we have a nice dip on QQQ, perfect, perfect time to get in. I would buy the 460 for 9,700 versus 51,000. We're going to press actually buy, got to change that here, actually clear that, click on the ask. There we go. Buy, okay? And then review and send and boom, now you're holding 100 shares. You wait until the stock passes that middle line of the Bollinger Band and then you can think about getting out of that leaps, okay? And putting on a different position later on. Now, that's exactly how I trade options. If you wanna learn more, I put another tutorial right here on my main strategy that has made me hundreds of thousands of dollars. Go ahead, click on this one and I'll see you in the next one. Take care.

This is one of my accounts that I show here on YouTube live, okay? Currently trading at $695,000. I put my money where my mouth is, so you're going to see exactly how I trade SPY and QQQ options. Currently, I'm up over 35K for the month. which is a 5.3% return, okay?

So I'm averaging anywhere from 45 plus percent per year on my portfolio. And if you look at my profit and loss statement from the last three months alone, okay, you could see that I am up over $100,000 in net profit. These are trades that I closed.

And my win-loss ratio is 93%. So I'm gonna show you exactly how to be profitable, not only profitable, but consistently profitable with a high win ratio because I do think that is very important. But before we get into it, if you do want my stocks and options plays directly in your inbox for free, click that first link down below in the description.

If you have any questions throughout the video, feel free to comment down below. I answer all comments or you can message me directly on Instagram at itsryanhildrith and you could even see into my personal life and what I do with my profits. Okay. So let's go ahead and jump into it.

Remember, this is not financial advice. This is just me sharing exactly how I've built wealth trading options in the stock market. Okay. So these are my four principles when trading SPY and QQQ.

All right. Comes down to these four principles. Number one is understanding the overall macro environment.

Are we in a bull market or are we in a bear market? You've probably heard the trend is your friend, and that is definitely the truth. You do not want to go against the trend.

it'll make your trading much harder throughout your career. Number two is understanding the VIX. If you've never heard of the VIX, then you're gonna wanna watch this video because this is the single most important thing that I look at when trading options. Number three is understanding and identifying key levels on the chart, the relative strength index or the RSI, and Bollinger Bands. Those are just a couple indicators I use.

I like to keep it simple and take a look at those when I am trading options. And number four, is choosing the right options strategy. I see too many people promoting on YouTube that you should buy options as a beginner. I don't think that's a good idea.

When you're getting into options, selling options is going to be a better play because your win rates are gonna be much higher and you're gonna be able to trade the markets, understand how they move, get consistent profits, not blow up your account like most people, including me. I've blown up many accounts back in the day when I was buying options. And I'm going to show you exactly how to sell options if you don't know how. And we will go into some buying strategies because I think once you get more advanced, you could definitely start buying options.

So understanding the macro environment. This is the single most important thing to learn. I didn't understand this prior to 2020 and it bit me in the butt.

In 2020, during that crash, I lost six figures because I didn't understand leverage and I didn't understand the macro environment. So we are currently in a lowering interest rate environment. This means that it's cheaper for businesses and consumers to borrow money and spend. So this affects SPY and QQQ because it's a conglomerate, right?

It's an ETF full of many different companies, right? So there's no individual stock risk on SPY and QQQ, but there is macro risk. So economy, how is the economy performing?

Are the interest rates going lower or higher? right? That's all going to affect SPY and QQQ. So more money is borrowed by the U S government via treasury bonds auctioned off by the federal reserve debt creates money. So the more debt that is issued, the more money that is created and the more money that is put into the market, this money plows into assets that appreciate such as stocks and real estate, because the people with that money, the wealthy do not want their dollars to be diminished because of inflation.

They want to keep it. their dollars to be in an asset that's going to go up faster than inflation. All right.

Not understanding this creates uncertainty and can leave you with big losses. So let's kind of look at exactly what I mean by that. So if we just look at QQQ, that's what I'm going to be looking at primarily today. QQQ. All right.

If we go back to, let's just say, right, let's go back to 2020 or 2022. Okay. The macro environment, this is what was happening. Back in December of 2021, they announced, the Federal Reserve announced, they will be raising interest rates. five or six times in 2022 because of inflation, right? Gas prices were going up like crazy, eggs were going up like crazy.

And when that happened, when they announced that, the market tanked. It tanked like 15% within one month, and then it continued to tank down back here in October of 2022, 36% on QQQ. SPY was down 25%. I prefer trading QQQ, it's a little bit more volatile, but you make more money trading it, okay, in the long run.

And then right here, okay, there was a pivot right here. October of 2023, they announced that they would be lowering interest rates. And then the stock market rallied, okay? It rallied and it recovered. It recovered this level in January of 2024, recovered from the all-time high in 2022. And we've been making a lot of money ever since then, okay?

So that is what I want you to understand when trading before even getting into it. You got to understand the product. You're not just trading a stock. You're not just trading an ETF.

You're trading the economy, interest rates, right? So there's so many different factors, okay? Now, understanding the VIX.

This is the next most important topic, okay? The VIX is the volatility index of the S&P 500. This is a fear index. It could literally tell you how much fear is in the market, okay?

It measures... volatility on S&P 500 options. So when the VIX is high, options premiums are overpriced, right? Options are fear-based products.

So when people are buying puts because they're scared of their stock going down, they're buying a fear-based product. They're buying insurance, right? And then there's day traders that buy puts and calls and they don't even understand that these things are overpriced.

So when the fear subsides, these options contract. in premium. So a lot of the value is extracted out of there. And if you're buying options, you could lose a lot of money just from time decay, just from time passing by. Okay.

So you want to be careful in trading options. Um, I have a full tutorial in my description on options. If you don't understand options, okay, there's a full tutorial.

You need to watch that, um, first, but if you do understand options and you've been, you know, studying on the internet, then we're good. We can continue forward. All right. So When option premiums are overpriced, there's a lot of fear in the market.

This gives you a key advantage when selling them, okay? You're selling overpriced options. Here's the key levels.

10 to 15, 25% of your portfolio can be allocated. That means there's like rarely, little to no fear in the market. 15 to 20 VIX means that there's some fear. So your portfolio can be 50% allocated, meaning you're invested 50% of your funds. And then if the VIX is above 20, 75 to 100% of your portfolio can be allocated.

You want to take advantage of fear. Most people don't invest when there's high fear, but as an option seller, you want to be investing when there's a lot of fear. I mean, even Warren Buffett says, you know, be fearful when others are greedy, meaning when the VIX is near 10 and be greedy when others are fearful, meaning when the VIX is above 20. I wish he just said that instead. Just tell us about the VIX, Warren Buffett, right?

So, and Warren Buffett sells options. He just doesn't talk about it. He does.

They collect billions in options premium every year. You can look it up. But, so let's take a look at VIX, all right? And let me give you an example.

August 5th, we had a huge sell-off in the markets, in the S&P 500 and overall in the stock market. And the VIX spiked up all the way to 67. Now, we hadn't seen this VIX spike this high since the crash in 2020, all right, when VIX went up to 97. So this was pretty rare, but I want you to look at QQQ, what happened on August when this happened, okay? When that happened here in August, we were trading here, and then boom, boom, boom, right?

We just plummeted. We plummeted down, okay? That was a huge drop.

And you could see that the VIX was... was spiking that whole way from July 17th all the way to August 5th. So we can go look at QQQ.

This was July 17th right here, all the way to August 5th. Okay. So when VIX goes up, the market tends to go down most of the time.

Okay. So with that being said, all right, that's usually when you take advantage and we'll kind of get into that. but first let's go ahead and talk about identifying key levels on the chart with rsi Bollinger Bands, and just support and resistance levels. So the RSI is a momentum oscillator that measures overbought and oversold conditions.

If it's trading above 70, the stock is overbought. Trading below 30, the stock is oversold. And Bollinger Bands measure how drastic price changes are and the probabilities that the price will revert to the mean or revert to the average price. So let me kind of unravel what that means.

So right here is the RSI. You could just go on Indicators, Trading View. Relative strength index, okay? And you're also gonna wanna pull up Bollinger Bands, all right? Select that, boom.

RSI, so again, 70s here, 30s here. As you can see, we were overbought right here. And what happened? Well, eventually the market tanked, okay?

So you have to be careful when we're overbought to not get into a long position because we could be on the brink of the market rolling over, all right? And that's exactly what happened. now when we're oversold as you can see qqq was right at 30 those are good conditions to either buy stock buy options or sell options right and as you can see right here we snap back up all right so that's the rsi now the bollinger bands what these means is these two lines are two standard deviations away from the average price meaning the stock is going to stay within these two lines 95 percent of the time and as you can see every time we pop out of the bollinger bands it sucks back in okay same up here it popped out of the top bollinger band sucked back in top sucked back in right and we're kind of at that moment where we broke the top right here and sucked back in so this is actually a good moment to start thinking about getting long all right so that's how to identify key levels now support and resistance is Not as important.

I do like to draw some lines and stuff like that, but really the Bollinger Bands are going to be more important, okay? Because these are kind of the levels that the stock is usually going to stay between. So let's talk about choosing the right option strategy.

When you're first trading options, you should not be buying them. You should be selling them via vertical spreads and cash secured puts. This ensures you're winning 80 to 90% of the time versus... losing 50 to 75% of the time with buying options and relying on stop losses.

We're not going to use stop losses. That's not how we trade options. Only if you're selling them. If you're buying them, then sure. I mean, I don't use them because I know how to buy them right.

And I'll show you exactly how to do that. Okay. So let's go ahead and jump into QQQ. And we're just going to place a trade. We're just going to go ahead and we're going to sell an option that's somewhere down here near this lower Bollinger Band.

Okay, so as long as the stock stays above here, we're going to collect that full premium. And there's a 95% chance that it's most likely going to stay above that. So what I'm going to do, and that's at the 500 level. Interesting enough, the lower Bollinger Bands at 500. So we're going to go to Tasty Trade.

We're going to log in trade and we're going to go to QQQ. All right. And let's take a look. We're gonna go 35 days out.

This is an example of a small account strategy. So if you have $10,000 or less, you're gonna wanna do a vertical spread. So you're gonna go vertical, short put, okay?

And we're gonna adjust this. We're gonna drag this to that 500 level and see how much premium we can collect. Perfect, that is actually where I want to go.

Especially with a small account, you gotta be safe. All right, so we're gonna put the short put at 500, which is 26 delta, and then we're gonna put the buy put at 495, all right? So what that's doing, you're risking 500 bucks because it's five points wide.

You're buying this, or you're selling this option, and you're buying this one. So that means if the stock goes below this, you're gonna be losing money here, but you're gonna be gaining enough money here to cover your loss past 500 bucks. So you could only lose It'll even tell you in TastyTrade, max loss 406 to make 94 bucks, okay? So that's about, you know, a 20% return, a little over 20%, all right, in 30 days. That's pretty good on your money, right?

So that would be a trade that I would place. I would sell the 500, buy the 495 in this vertical spread, risk 400 to make 94, and your probability of profit is 75%, okay? So that's pretty good odds there.

Now, if you have a big account, you would sell a cash secured put. So we're going to delete this leg and I would sell the 30 Delta. Okay.

I would go closer in a small account. You want to go 25 Delta or less in a bigger account. You want to go 30 Delta.

All right. And you're going to collect 695 bucks. And let's calculate the return there.

695 divided by 505. Oh, 505, there we go. It's about a 1.3% return in about a month, okay? So that's decent.

Obviously, you can get higher returns trading individual stocks, but we're talking about QQQ and SPY, all right? So that's what I would do here. Pretty good return, 1.3%. So that's gonna annualize to close to 20%.

for the year um annualized and compounded monthly all right so that is exactly what i would do there now if you are start getting good at this you start collecting premium you're like okay i like selling options i get a high probability of profit i'm making some money i'm getting comfortable now you can go ahead and try to buy options which i would only do on qqq in times like this when we are approaching that lower bollinger band because every time we do We snap back up and you can make a lot of money, okay? Now, it may take longer to recover, so I'm gonna show you exactly how I would do it. What I would do is I would go here. Let me just clear this trade.

Go to the options chain and you're gonna go far out. You're gonna purchase LEAPs, Long-Term Equity Anticipation Securities, all right? LEAPs basically allow you to hold 100 shares, like controlling 100 shares, and you don't have to worry about time decay.

Okay. Cause every time that every day that goes by, right. If we're, we're going to go 364 days out, December 19, 2025. If you want to be safe, go out to 2026. All right. Every day that goes by on these options. Okay.

Um, let's look at the, yeah, this is the theta. All right. So every day that goes by on these particular options, you're losing like five bucks. You're losing five bucks a day, just in time decay.

All right. That's why I sell options because time decay works in my favor, right? But if I wanted to buy options, this is how I would do it.

I would go to the 70 Delta, which is going to be somewhere right here at the 494.78. So QQQ is trading at five, let's just say 510. You're purchasing the 494, which is down here. Okay.

And that's going to cost you about 7,200 bucks, but you get to control a hundred shares. So That would have costed you $51,000, but now you get to control the same amount of shares for 7,000. So you're using leverage.

You're getting leverage on your money. Okay. So I would purchase that one, the 494. All right.

Which is actually, no, that's the 63 Delta. I would go up actually to the 70 Delta, which means where every dollar QQQ moves up, you're going to make 70 cents. Okay. So that's the 460. So on the chart, that's going to be your purchasing right.

Here, which gives you the right to buy 100 shares at 460 by expiration, but you're not going to wait till expiration, okay? You're just going to hold this like you're holding shares. So let's just say we have a nice dip on QQQ, perfect, perfect time to get in. I would buy the 460 for 9,700 versus 51,000.

We're going to press actually buy, got to change that here, actually clear that, click on the ask. There we go. Buy, okay? And then review and send and boom, now you're holding 100 shares. You wait until the stock passes that middle line of the Bollinger Band and then you can think about getting out of that leaps, okay?

And putting on a different position later on. Now, that's exactly how I trade options. If you wanna learn more, I put another tutorial right here on my main strategy that has made me hundreds of thousands of dollars. Go ahead, click on this one and I'll see you in the next one.

Take care.

Transcript for:Effective Strategies for SPY and QQQ Options

Transcript for:
Effective Strategies for SPY and QQQ Options