Real-time options education and strategies
The Condor is one of the most powerful option strategies for generating a very favorable reward/risk ratio. It can offer generous amounts of long (positive) Theta as well as short (negative) Vega. Being short Vega tends to reward a position where the underlying instrument’s price grinds higher. That is why I often utilize an out-of-the-money … Read more
Lots of traders like to day trade. Some like to swing trade. Most don’t know how to decide between the two. So here’s a thought; how about I let the price of the underlying instrument determine that for me? How’s that work? Read on and you’ll find out! On that risk profile (above) of day … Read more
This post is going to demonstrate how I use Call Condors to initiate longer-term (typically 3 months to 1 year) positions with relatively little directional risk when the trade is first placed. It is a trade that is designed to profit from a trending stock. If you look at the Thinkback chart and risk profile … Read more
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
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
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