Building wealth from the stock market is never easy, but the world of option trading opens up a lot of alternative approaches to making money. Recent events have shown that the "buy-and-hold" approach to stock trading carries substantial risk. With a volatile market, a safe "in-and-out" approach is much more desirable. Of all the option trading strategies available, trading credit spreads is by far the safest and simplest method. It has a risk profile significantly lower than stock trading, and it offers much better profit than any type of stock trading strategy around.

Selling credit spreads takes advantage of the fact that the value of any option declines as the expiry date of the option approaches. It does this particularly fast during the last 30 days of the life of the option. It has been said that 90% of option buyers lose their money. This means that those who sold the options to those unfortunate buyers win 90% of the time!

What are the advantages of credit spread trading?
- It is short term - trades are typically less than 30 days in duration, and take advantage of short term trends in the market;
- it is low risk - trades have a better than 90% of success - always! You know exactly what the risk, return and profit will be before you enter a trade - there is no guess work.
- profit is up front - a trader gets his profit immediately, and only needs to protect that profit for a short period;
- market fluctuations are mostly irrelevant. The market can continue its trend, stagnate, or even turn against you to a certain extent, and your profit is completely safe and untouchable.
- simple technical analysis - other options trading strategies (and stock trading) require intense fundamental and technical analysis, significant understanding of the market, and the ability to "beat the news". Selling Credit spreads needs a very simple trend analysis procedure, which should not take longer than 10 minutes a day, and the ability to plan for upcoming events such as earnings reports.
- time spent in monitoring the trade is very low;
- profits range between 5% and 20% per month, depending on how actively the spreads are traded. Compounded, this leads to significant growth in a profile. Starting with $1,000 and gaining a steady but sure 15% per month, you can get your first million dollars in four years, without deductions for ulcer treatment.

What do you need in order to start building wealth by selling credit spreads?
- you need an account with an options trading broker such as Thinkorswim or OptionsXpress.
- you need a minimum balance of $1,000, in order to cover margin requirements for selling credit spreads.
- you need to be able to identify a trend in the market and in your chosen stock.
- you need to be able to look ahead for predictable events such as earning reports and dividend payments.
- you need about 15 minutes per week.
.....and that's it!

You do not need nuclear physics degree in fundamental and technical analysis; you do not need to spend hours pouring over graphs and indicators; you do not need to go bald, get an ulcer or a heart condition; and you definitely do not need to pander to your obsessive compulsion to constantly monitor your trade, making fiddly adjustments on the way!

If you are looking for a safe steady approach to building wealth, then you cannot go wrong by having close look at the potential of selling credit spreads.

By: Rob Forbes

Article Directory: http://www.articledashboard.com

I sell credit spreads every month, and even when a very few have gone against me, I still build 15-20% growth on my portfolio each month. If you want to see exactly how to do it, and which stocks I like to trade, go to this page for more information on selling credit spread

What is a Credit Spread?
When you sell a credit spread, you simultaneously sell one option and buy one option for a stock as a single transaction. The options are traded for the same expiration month, with different strike prices and are either both call options or both put options. You sell the more expensive option, and buy the cheaper option, resulting in a credit to your account.