Options trading strategies

How we trade at MTO Opciones: each strategy explained step by step, with its advantages, its risks and real trades that are already closed.

MTO Wheel Spread: What It Is and How We Use It, Step by Step

The MTO Wheel Spread starts with an in-the-money put credit spread. If the stock rises, you close early for a profit. If it falls, you sell the protective put, accept assignment of the shares at an effective price close to market, and sell calls above that price until you exit at a profit.

In-the-Money Put Credit Spread: How We Build It and Why

An in-the-money put credit spread is built with one or both strikes above the stock price. It collects much more premium than the textbook (OTM) version, so net risk is lower and a small rally lets you close for a profit. The trade-off: the stock needs to go up.

Call Debit Spread: How to Profit From a Rally by Paying Less

A call debit spread means buying one call and selling another with a higher strike and the same expiration. It costs far less than the call alone, and your maximum loss is what you paid, in exchange for capping your profit. At MTO we open them long-term on good companies and close them as soon as there's a solid profit.

Rolling Options: When We Do It and What to Watch Out For

Rolling means closing a short option and opening another with a later expiration and, often, a different strike. At MTO we only roll if we want to stay in the position, for a net credit, without going too far out in time, and improving the strike when possible. Note: the closed option leaves a realized loss even if the roll is for a credit.