Hughes Optioneering

April 20, 2017

Market Neutral Spreads

By: Chuck Hughes

As traders we are always excited when our option trading system or program produces a winning trade. But this poses a dilemma. Do you hold a winning call option trade for further upside profit potential or do you take profits in case the stock or ETF declines in price with the possibility of a profitable option trade turning into a loss?

Iím sure most of us have closed out a winning trade only to see the underlying stock or ETF continue to rally knowing that we left profits on the table. We also know from experience that it is very difficult to watch a winning trade develop into a losing trade. This is very hard on your psyche as a trader and can help you lose confidence in your ability to be a successful trader.

In this video learn how the Hughes Optioneering Team solves this dilemma with their technique for protecting profits and at the same time participating in any further upside profit potential.

This technique is simple to implement and once it is in place you can forget about the trade. No need to monitor the markets or world events. Bad earnings reports donít matter. A severe selloff in the underlying stock or ETF actually produces more profits with this technique. You can place the trade and take a vacation!

The Team will look at an actual Market Neutral Spread for the Dividend ETF that will profit regardless of the price movement of the Dividend ETF. The analysis below reveals that if the Dividend ETF remains flat at option expiration a $778 profit and134.1% return will be realized (circled). A 20% increase in the ETF results in a 449% return (circled) and a 40% decline in the ETF results in a 469% return (circled).


Market Neutral Calculator


Learn how to set up option spreads that can profit if the underlying stock/ETF increases in price, remains flat or declines in price.  


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Futures, stocks, bonds, currency and options trading involves high risks with the potential for substantial losses.

PLEASE READ. Past results are not necessarily indicative to future results. There is a substantial risk of loss trading stocks and options with or without this or any other advertised product, service or system. Also, hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.