In this interview, Henry Moldavskiy shares his experience of using long bull call spreads and other strategies during the remarkable growth of his portfolio in 2020. He emphasized the importance of taking calculated risks and diversifying your portfolio, when necessary, to adapt to changing market conditions.

Henry’s journey from a 100K account to a multi-million dollar portfolio serves as an inspiration for traders looking to achieve financial success through options trading. His transparent approach on his YouTube channel and his commitment to educating others on options trading demonstrates the power of authenticity in the world of trading. You don’t want to miss it!

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Show show hightlights include…

Long Bull Call Spread Strategy

A long bull call spread involves buying a call option and selling another call option simultaneously to offset the cost and limit potential losses.
Henry recommends long bull call spreads as a go-to strategy because they offer a structured approach with limited risk.

He suggests starting with slightly out-of-the-money call options, for example, buying a $100 call option when the stock is at $90, and then selling a $105 call option.
The cost of the strategy is reduced because of the premium received from selling the second call option.
The maximum profit occurs if the stock reaches the strike price of the short call option (e.g., $105).

The profit can be substantial compared to the initial investment.

Managing Long Bull Call Spreads

Henry recommends leaving long bull call spreads untouched once set up. The key is to be patient and not constantly trade or manage the position.
The ideal time to close a long bull call spread is typically on the last day of expiration.

If the trade is not profitable, it should be closed for a loss.

Scaling the Long Bull Call Spread

Long bull call spreads are more suitable for traders with smaller accounts.
As your account grows, you may need to diversify into other strategies for higher safety and consistency.

Henry suggests moving away from long bull call spreads after reaching a $50,000 account size.
Beyond $50,000, consider other strategies such as credit spreads and the “wheel” strategy (selling puts and covered calls).

Diversification & Risk Management

Diversification is essential to minimize risk, especially as your account size increases.

The wheel strategy and credit spreads provide additional options for diversification.
Consistent risk management is crucial to long-term success in trading.

Henry is motivated to teach and share his knowledge because it gives him a sense of purpose. He believes in helping others achieve financial freedom through trading.

Continuous learning is essential for traders at all levels. Remember that trading is a journey, and learning from experiences, both wins and losses, is crucial for personal growth and financial success.

Henry’s insights on options trading, specifically the long bull call spread strategy and the importance of diversification, can benefit traders looking to enhance their skills and achieve consistent returns in the options market. His journey and commitment to sharing knowledge offer valuable lessons for traders at all levels of experience.

Don’t forget to subscribe to the “Invest with Henry” YouTube channel for more in-depth content and tutorials on options trading.

Diversification is a risk management strategy that can be applied to options trading, just as it can be applied to other forms of investment. In options trading, diversification involves spreading your investments across different assets, strategies, or positions to reduce risk and protect your portfolio from significant losses. Here’s how diversification relates to options trading:

Asset Diversification: Traders can diversify their options portfolio by trading options on various underlying assets, such as stocks, indices, commodities, or currencies. This approach spreads risk by reducing exposure to a single asset class.
Strategy Diversification: Options traders can employ various strategies like covered calls, protective puts, straddles, strangles, iron condors, and more. By using a mix of strategies, traders can adapt to different market conditions and mitigate losses.

Expiration Diversification: Diversifying the expiration dates of options contracts in your portfolio can help spread risk. Some options may have short-term expirations, while others have longer durations. This approach can provide flexibility and balance.
Strike Price Diversification: When using strategies like vertical spreads or iron condors, traders select multiple strike prices. This diversification allows them to potentially profit in a range of price movements, reducing the risk of a single direction move hurting the portfolio.
Implied Volatility Diversification: Implied volatility levels can significantly impact options prices. Diversifying your portfolio by including options with different implied volatility levels can help manage the impact of market uncertainty.

Risk Tolerance and Capital Allocation: Diversification should be based on your risk tolerance and available capital. Allocate a portion of your capital to various strategies and assets to ensure you can withstand potential losses in any single position.
Event Diversification: Events such as earnings announcements or economic releases can introduce volatility to the market. Diversifying your positions to include options that expire before and after these events can help manage the associated risks.
Sector or Industry Diversification: If you primarily trade options on individual stocks, consider diversifying by including options on companies from various sectors or industries. This approach can protect you from industry-specific risks.

Market Conditions: Diversification can help you thrive in different market conditions. Some options strategies work better in trending markets, while others excel in range-bound or volatile markets.
Risk Reduction: By diversifying your options positions, you can reduce the potential impact of a significant loss in a single trade. This is crucial for preserving capital and preventing catastrophic portfolio damage.

It’s important to note that diversification doesn’t eliminate risk entirely, but it can help you manage and reduce risk in your options trading. Traders should carefully consider their objectives, risk tolerance, and market outlook when implementing a diversification strategy in their options portfolio.

Connect With Henry Moldavskiy

Website: https://www.investwithhenry.com/
YouTube: https://www.youtube.com/@InvestwithHenry
Facebook: https://www.facebook.com/henry.moldavskiy

LinkedIn: https://www.linkedin.com/in/henrymoldavskiy/
Instagram: https://www.instagram.com/investwhenry/

Connect With Casey Stubbs

Website: https://tradingstrategyguides.com/

Website: https://caseystubbs.com
Website: https://globalproptrader.com/
YouTube: https://www.youtube.com/TradingStrategyGuides

YouTube: https://www.youtube.com/caseystubbs
Twitter: https://www.twitter.com/caseystubbs
Facebook: https://www.facebook.com/TradingStrategyGuides

LinkedIn: https://www.linkedin.com/in/caseystubbs/

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