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Credit SpreadsThrough the use of credit spreads and risk management, the TimeMeansMoney™ program collects premium by selling options, thereby attempting to take advantage of the time value decay aspect of options.
A credit spread involves the simultaneous sale of an option that is near to the money and the purchase of an option that is further from the money. Because the option that you sell is closer to being in the money, it is worth more in premium than the one you buy. You collect more premium than you spend, resulting in a net credit to you.
The most you can lose with a credit spread is the difference between the strike prices of the two options plus any fees or commissions. Credit spreads allow you to trade with predetermined predefined risk. Trading with credit spreads means you always know the maximum you can possibly lose. Trading spreads may not be less risky than trading outright futures and options positions.
The TimeMeansMoney™ program first identifies trades that have a potentially high statistical probability of success. We then design suitable credit spreads that will limit risk while allowing for potentially maximum profits to be taken. Throughout the life of the trades, entry and exit points are determined, monitored, and with your approval, executed for you. While we do the work, all trade recommendations generated by this program are ultimately yours to take or ignore.
Option writing as an investment is absolutely inappropriate for anyone who does not fully understand the nature and the extent of the risks involved and who cannot afford the possibility of a potentially unlimited loss. It is also possible in a market where prices are changing rapidly that an option writer may have no ability to control the extent of his losses. Option writers should be sure to read and thoroughly understand the Risk Disclosure Statement that is provided to them.
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