Confused on Identifying Combinations, Straddles, Collars and Spreads?

追加: 2026-05-14

[00:00:00]How do I idea the combination? Okay.

[00:00:01]Well, here we go. You know, people were asking us to do things in a live stream that I think are better served watching a video. You can put any of these into the channel search bar and you'll see all kinds of things for that. Okay. So, I'm confused about how to idea. A combination is a straddle with different strike prices. You wouldn't do anything differently. If I didn't tell you it was a combination, you just thought it was a straddle, you would be fine. And the way to identify a combination or straddle is dosa.

[00:00:31]Dosa different option same action. You have two types of option contracts calls and puts. So combo would be a uh different again different option call and put same action. You would be are buying buy by or sell pizza is what I think of Caesars's right. So that's how you identify a combination. A combination or straddle is long two different type of option contracts or short two different types of contracts.

[00:01:00]Once you've identified it as a combination or a straddle, there's four test questions. First is can you identify it? The second is can you calculate the break evens?

[00:01:12]You got two. It's the only strategy on seven that you're test on with two break evens. An upside break even downside break even. Where is it profitable? We have a good memory aid device for that.

[00:01:22]short inside, long outside silo. If it's short combination or short strat, you want it in between your two break evens.

[00:01:30]If it's long, you want outside. The four test question, when do you use it? All speculative strategies, you're either buying volatility, it's your friend, you need movement, or you're selling volatility, it's not your friend, you want to stay there. You buy a straddle or combination where you expect volatility, but direction is uncertain.

[00:01:49]You know, for example, I think I'm gonna short thousand shares of GameStop, Brian, because the guy's such an idiot.

[00:01:57]This Ryan Cohan is, you know, I think, what an idiot. Now, if I didn't want to short the stock, I could also buy a straddle. Say, no, I'm not sure where GameStop is going to go, but I don't think it's going to stay at 25. It's either go way up or way down. Okay.

[00:02:11]Caller we talked about earlier. A caller is where you're sending selling a call to pay for a put. So that's a caller. It would be a long stock with a short call and a long put. It's called a caller because you don't participate past the strike price on the call or the strike price on the put. That's why it's called a caller. I earlier said I think it's very low probability you would see a collar is the correct answer. I think it's usually a distractor like iron butterflies are distractors. A diagonal spread is when everything is different, the strikes as well as the expiration month. So that's a type of spread. The ones you're going to see most on your test are vertical or price spreads where what's difference is the strikes, right?

[00:02:56]And then a horizontal spread would be where the months are different and that's called a calendar spread. Okay? A credit is when you have more money in than out. Debit is when you got more money in than out. You're either selling the spread, credit spread, or you're buying the spread, debit spread. Bullish or bearish is determined by the larger premium. And then narrow, wide and narrow depends on it again what kind of do you want the spread? The spread's the difference. You know, uh, when we're betting on the game, I say, "Hey, Brian, what's the spread on the game tonight?"

[00:03:25]The spread on the Lakers is 15 and a half points. Wow. You know, they're playing the Thunder. Now, I could make a bet where I want the score to be outside 15 and a half points. Woo! 16 points.

[00:03:37]I'm a winner. Net spread. That's the difference. Or there's people want to be in there 10 points. I'm a winner, right?

[00:03:43]So that refers to whether you bought the spread and the difference in the premiums. Debit always goes with widen.

[00:03:48]When you're wide like Dean, you need to exercise.

[00:03:52]Debit, exercise, widen goes together all the time. Do the due. And the narrow goes with credit. Credit expire narrow.

[00:03:58]You want to be smaller. Credit has six letters. Expire has six letters. Narrow has six letters. You I have an entire option playlist. You can put any of this in there and 10 videos will show up that will walk you through it. Uh Brian has the whiteboard going. There you go, Brian. There's your whiteboard.

[00:04:13]>> No, I was just uh putting up what you were saying again. I I hope Armando was with us when that gentleman or young gal uh was asking the very same question.

[00:04:24]You got to watch Dean's videos on this, especially if you're tested Saturday.

[00:04:29]>> It'll change your life. You know, being able to identify these things is is is kind of step one because you can't really answer any strategy.

[00:04:38]>> Yeah. Otherwise, you're just going to be staring at the screen, right? There's two things, Armando. If you go don't if you can look at Brian's whiteboard right now and know that that's a choice to buy the stock at 50 and a choice to sell the stock at 50 contract specifications.

[00:04:53]And then you can track money in or out.

[00:04:55]He doesn't have any premiums there, but if you can track the money, right?

[00:04:59]Either net the money or you add the money. Here we would add the three and the one for four. So check out my it's the fourth video in my options lecture called advanced option strategies. You certainly have time to do that and you will see spreads. You will see spreads.

[00:05:13]So, >> you got to watch those things. It'll change your life.

[00:05:16]>> Well, thank you. I think Brian Brian and I we just talk about the gratification we get. And you know, even most of that comes from when you pass the test and you get into our industry and you know, you're able to take care of yourself and your family and your clients. But I tell you, Brian, isn't there also the gratification we get when the lights go on, somebody gets options? Oh my god, I hope 125 options, right? And we we feel like we're pretty good at that. We can we can get you the lights to go on. Now, I would tell you, Amard, when the lights go on, they typically go out again. So, you gota get that light lit and keep it lit.

[00:05:48]>> That's why I do not exaggerate when I say these videos either Deans or mine or both or whomever will change your life because it it really means a lot. I mean, Dean and I have basically made our reputations on our options instructions and the visualness, the uh graph that I put up the last time. Yeah. Watch those videos, would you please?

[00:06:07]>> Please do. Please do.