Real-time options education and strategies
Paul My entire option trading method revolves around the concept of the Delta Hedge (DH) strategy. Any new option trade that reduces the Delta (directional) risk of a current position is technically a DH but my particular strategy is to first buy a single option (Call or Put depending on the expected direction) or a spread … Read more
When initiating a new trade I often start by buying a 30 Delta option. What’s so special about 30 Delta options? Many option courses recommend buying in the money (ITM) options of 60-80 Deltas. Are they wrong? Yes…and no. It depends on what you are trying to achieve. My system for trading options is all … Read more
The 30 minute chart with the weekly high, low, and half-back (50% retracement) lines automatically drawn. For TOS users here’s a link for that chart setup: https://tos.mx/CKQburZ. Everything is explained on the two charts. If you have questions or comments you can contact me through the twitter feed.
The SPY was showing signs of weakness on Wednesday even as the daily candle was forming a large 2u candle. Market profile helps expose the internal structure of the daily candle and allow for a look ‘under the hood’. The emotional buying on Wednesday led me to tweet this observation. Below is the actual chart … Read more
This is a simple but effective strategy that builds profits while reducing risk or, in this example, actually locking-in a minimum profit. The system can be adjusted to make fewer trades but I used these parameters to illustrate the concept. These are the actual prices of BABA beginning on 1/4/2021 as shown on ThinkBack. The … Read more
Before I go into the specifics of these trade scenarios using the SPX daily chart I want to make the point that I use the same strategy with the same parameters on charts on all time frames. The levels referenced in this post are based on the prior candle so the same analysis applies to … Read more
This ThinkBack simulates establishing a long (bullish) option trade on 12-31-2020. Comparing buying a 60 Delta Call to a 30 Delta Call. If I want to compare the actual Deltas I would have to purchase two of the 30 Delta Calls so that both positions start out with approximately 60 Deltas. However, one of the … Read more
I want to preface this lesson with an explanation of why this trade will look larger in size than my typical trades from the past in this service. I used to have 2 separate trading accounts that go back many years and I finally got tired of the occasional mistake of hedging a position in … Read more
The first step in my process of initiating a new option position is identifying a promising chart setup. I’ll consider setups on various time frames anywhere from the 65-minute charts all the way up to the monthly charts. My typical trades originate from the daily and weekly charts but I’m always looking for the best … Read more
One of the most reliable chart patterns for an upcoming directional trend is the consolidation range. Below is the daily chart of MU. Price experienced a strong 45% rally from the beginning of November thru December 4th. Since then price has moved sideways in a $5 range between ~69.50 and ~74.50. Since a range like … Read more