Why did we buy the $704 call?

• If you only sold the $700 call (Naked Call), and SPY suddenly shot up to $800, you could lose thousands of dollars.

• By buying the $704 call, you have capped your risk. If the stock rallies to $800, your insurance kicks in at $704 and stops the bleeding.

This is a “Defined Risk” trade. You know exactly how much you can lose before you even start.

👨‍🏫 Mentor’s Insight: The ‘Rent’ Collector

“Stephen here. I want you to think of a Bear Call Spread like being a Landlord.

You are charging someone else ‘Rent’ for the right to buy your SPY shares at $700. Because you don’t think SPY is going to hit $700 anytime soon, you are happy to collect that rent. If the stock stays at $672, you win. If it drops to $600, you win. Even if it goes up to $695, you still win.

In our weekly 1-on-1 mentoring sessions, I’ll show you how to pick strikes that are ‘way out of the money’ to give yourself maximum room to be wrong. Think the market is hitting a resistance level? Book a Free Strategy Call today and let’s find a safe ceiling together.”

🛠️ Stephen’s Implementation Tip:

• Credit = Profit: In this strategy, the number you see as a “Credit” is your maximum possible gain.

• Quant Search: Click the chat bubble