>>>Nate and I will cover where we’re looking for opportunities after today’s moves, and we’ll do some live trading to close out the week on a high note — LIVE at 3:30 PM ET on Closing Playbook!<<<
Look, I’ve been testing different options strategies for years, and the results I’m sharing today might completely change how you approach the market.
Before we dive into the numbers, it’s important to note that these findings are based on my personal testing and may not be universally applicable.
Individual results can vary depending on market conditions and trading strategies.
Here’s what I discovered…
While basic calls with 25% profit targets and 25% stop losses managed a 60% win rate, debit spreads absolutely crushed it with an 86% win rate. That’s a massive 26% advantage that can’t be ignored.
The Time Decay Problem Every Trader Faces
Time decay is the silent killer of most options trades. You can be right about direction, right about timing, but still lose money because theta eats away at your position.
This is where debit spreads shine.
The beauty of a debit spread is that it limits time decay by selling options alongside buying them, creating a natural hedge. Debit spreads can profit even when the S&P 500 barely moves — something that would devastate simple call and put options.
Why I Prefer Debit Spreads Over Basic Options
The debit spread dominates for several key reasons.
First, there’s the lower cost of entry, which means you’re risking less capital per trade. Second, debit spreads limit time decay exposure, protecting you from that constant erosion.
Third, they can pay even when the market barely moves — I’m talking about S&P 500 movements as small as 0.15% to hit targets.
But here’s the kicker…
Debit spreads don’t just have a better win rate — they made more money over the long haul in my testing. More overall profit combined with higher success rates?
That’s why I prefer this strategy over basic options every time.
The numbers speak for themselves. When you’re looking at 60% win rate versus 86%, that’s because of time decay protection. It’s really that simple.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Evening Edge: Target 2X Returns on Cheap, Mispriced Options
If you’re yet to learn how Graham has been cleaning out the options market by leveraging a regular pricing error…
Then you shouldn’t miss today’s Evening Edge broadcast. You’ll also see how to begin exploiting this error as soon as tomorrow
