Tom Preston Turns a Bearish Housing View Into a Cheap Spread.

Tom Preston starts from a simple thesis: as rates climb, buyers get priced out, and he has been bearish on housing for a while. Rather than fight the thin markets in individual builders, he goes to the real estate ETFs, and the first thing he checks is not a chart. It is the open interest and how wide the markets are, which quietly rules out most of the candidates. The trade he lands on is the interesting part. He buys an in-the-money put spread for less than the value already baked into it, so if the fund simply sits still, the spread grows toward that value. That is why a debit spread can carry positive time decay, the opposite of what most traders assume when they buy anything. All views are his. This is education, not a recommendation. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 The bearish real estate idea 00:19 Comparing the big real estate funds 00:52 Checking the markets and open interest 01:39 Why he avoids individual builders 02:27 Passing on the call spread 02:45 Building the put spread instead 03:35 Why a debit spread can pay theta 04:11 Growing into intrinsic value #tastylive #optionstrading #tompreston #cherrybomb #realestate #thetadecay #debitspread #interestrates #optionsstrategy #optionseducation tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.