Wealth and Health Podcast with David Jaffee

Episode: 🚨 Did ‪@ashleytradingwithashley‬ LIE or Post a FAKE TRADE? 🚨

Date: March 31, 2025

Episode Overview

David Jaffee explores a controversial options trading strategy presented by @tradingwithashley, who claims to have turned a $4,000 loss on a Tesla put credit spread into a $20,000 gain, and potentially a 40% annualized return. The episode dissects Ashley's strategy, her explanation of the trade mechanics, and the validity of her claims. David critically analyzes the video, challenging both the technical details and Ashley’s credibility as an educator, with a candid and irreverent tone.

Key Discussion Points & Insights

1. The Premise: Ashley’s “Ultimate Put Credit Spread Hack”

• Ashley’s Claim (01:21, 04:02):
  She allegedly turned a $4,000 loss into a $20,000 win on a four-contract Tesla put credit spread by “breaking apart” the trade, utilizing extra cash, and rolling her short puts lower and further out in time.

  “I was able to break apart the trade and maneuver it in such a way that I turned that four thousand dollar loss into over a twenty thousand dollars... and potentially a 40% annualized return.” – Ashley (01:21, 02:58)

2. David’s Real-Time Analysis & Skepticism

• Strategy Dissected (02:58 – 05:43):
  David speculates Ashley’s process likely involved rolling the spread to a naked put and extending duration, but he quickly points out fundamental misconceptions in her explanation of credit spreads:

  “If you think a stock is going to go up, you’re much better off buying a call... when you sell options, your maximum profit is the credit you received...” – David (05:43)

• Risks with Rolling & Margin (03:00, 06:42, 09:00): He warns that rolling can dramatically increase risk, especially if volatility spikes and margin requirements balloon.

3. Step-by-Step Breakdown of Ashley’s (or a Simulated) Trade

• Ashley’s Walkthrough (07:22 – 13:43):
  She describes managing a deep-in-the-money Tesla credit spread, selling off her profitable long puts, and rolling the short side lower and further out in time for credit:

  • She claims this “releases capital” and reduces assignment risk.
  • David interrupts, noting major buying power issues and highlighting that rolling to naked positions significantly increases, not decreases, capital requirements.
  • Ashley claims she rolled from $280 to $230, collecting a $1,500 credit per contract, and states her buying power actually decreased (23:35).

  “That is going to lock in another $4,795 in cash... However, it’s going to leave one of my positions uncovered...” – Ashley (21:51)

• David’s Critique:

  • He calls out contradictions in contract numbers (three versus four), trade dates, and risk management.
  • Points out that Ashley conflates market value of long options with buying power (28:02).

  “There’s no way that you’re going to free up cash by rolling a $10 wide put credit spread to a naked position. Rolling to a naked position is going to use up much more buying power.” – David (21:33)

4. Evidence of Possible Inconsistency or Fabrication

• Mismatch in Trade Examples (16:46 – 20:01, 24:45):

  • David believes Ashley created a new, relatively safe trade for demonstration, rather than showing her real, original (riskier) trade.
  • The demo trade has limited risk and loss, but contradicts the larger loss numbers and risk claims earlier.

  “This trade as it is right now, it doesn’t need to be adjusted at all... [she] doesn’t want to show you the actual trade...” – David (18:18, 18:47)

• Buying Power and Capital Misrepresented (24:45 – 28:31):

  • David highlights that Ashley’s statements about “freeing up” capital and reducing buying power do not match reality or actual option margin calculations.
  • Points out the significant discrepancies in cash and buying power before and after the trade adjustments.

5. Community, Education, and Critical Tone

• Ashley’s Community (19:19, 32:12):

  • Ashley discusses how her membership community brainstorms trade scenarios, but David disparages the utility of the group and questions the value of paying for such education:

  “I love this community because when I make mistakes, you guys pay me with your membership fees and it reimburses me for the money I lose.” – David (32:16)

• Closing Thoughts and Challenges (31:03 – 33:09):

  • David challenges listeners to provide proof of Ashley’s actual trade, suggests she doesn’t understand basic options concepts, and reiterates his skepticism in a comedic, biting manner.

  “In my overall opinion, I just think that Ashley is so stupid. Maybe you disagree, but let me know...” – David (33:09)

Notable Quotes & Memorable Moments

• On portfolio discipline and cash (01:54):

  “If you don't have the cash waiting on the side... you're not going to be able to maneuver something like this.” – Ashley

• On deep skepticism of buying power (09:00):

  “If she's going to end up rolling this down to naked, ... the buying power requirements on a cash account for four contracts are going to be $120,000...” – David

• On the disconnect with assignment risk (18:18):

  “For every put credit spread that she sold, she's only showing a loss of about $500... So here she's only showing three. This trade is nowhere even close to being at risk of getting assigned.” – David

• On Ashley’s use of margin concepts (28:24):

  “No, that's completely false... your available buying power has actually been cut in half.” – David

• On questioning the legitimacy of the trade (31:03):

  “If anyone is in her discord group, please share with me the original trade. ... I have no way of knowing this. I think that she ended up selling a short put with a strike of over $400.” – David

Timestamps for Key Segments

| Timestamp | Segment | |-----------|-------------------------------------------------------| | 01:21 | Ashley outlines her “$4,000 loss to $20,000 win” hack | | 02:58 | David speculates on rolling and risk consequences | | 07:22 | Ashley describes cleaning up her Tesla position | | 09:00 | David warns about naked puts and margin explosions | | 13:12 | Extending duration, risk in bear markets | | 16:46 | Ashley walks through new (possibly fabricated) trade | | 18:18 | David spots contradictions and lack of assignment risk| | 21:51 | Ashley demonstrates locking in $4,795 from long puts | | 24:45 | Buying power and capital claims scrutinized | | 28:02 | David exposes misunderstandings on buying power | | 31:03 | Call to the community for proof and opinion |

Recap & Takeaways

• Strategy Review: Ashley’s purported strategy involves advanced rolling and risk management but, according to David, demonstrates deep misunderstanding of options mechanics—especially on margin, assignment risk, and capital requirements.

• Critical Analysis: David strongly suggests Ashley did not show her actual trade and ridicules several claims and the contradiction between the demonstration and the scenario described at the outset.

• Community Value Questioned: David repeatedly asserts listeners would be better off seeking free education elsewhere, given the lack of technical rigor and consistency.

Conclusion:
This episode is a critical and often sarcastic investigation into the truthfulness of a viral “trade hack,” providing both advanced options insights and a cautionary tale about vetting educators and strategies. Whether Ashley’s purported trade was legitimate remains unresolved, but the episode strongly cautions listeners to dig deeper, demand transparency, and know their risk before following any “magic bullet” options strategies.