Real-time options education and strategies
Below is my current SPX position. The position is comprised of 2 trades: I bought a 5-lot of $75-wide Put Vertical Debit spreads to initiate the position and, after SPX dropped, I rolled down the long Puts by $25 creating a 5-lot $50 wide Put Vertical Debit spread and, in the same transaction, I sold … Read more
Are you the type of trader who likes your profits as soon as you can get them or would your rather let them ‘run’ with the potential of a much larger profit later? Not sure? Maybe a little of both types? Here’s what I typically do. As a trade progresses with a profit I like … Read more
(1) My portfolio was long about 35 SPX Beta Weighted Deltas after the close yesterday. Not a lot compared to my typical position but certainly enough to protect. With the prospect of a government shutdown looming the indexes could take a hit here. Overall I think the indexes, especially small caps (RUT), will rally strongly … Read more
Paul gave me these screenshots and asked me to finish the analysis. Here goes: Just before noon on Friday, Paul bought the 24SEPT 4425/4400/4375/4350 put condor in $SPX. He paid $3.00. The Put Condor has an especially effective risk profile. The position carried just -2.67 deltas, and had a $300 max loss and a $2,200 … Read more
Very important concept tweeted by Steve Burns and validated by the ‘Horse’. They both know what they’re talking about. Sounds good in theory but how do you do that? That’s what this post is about. Read it, understand it, trade it. Ask questions if you don’t get it! Step 1: Wait for a setup that … Read more
Paul put on a nice new trade in $AMZN last week. We discussed it a little bit in real time on the Twitter feed, but the trade deserves a more thorough breakdown because it contains a lot of good lessons about price action and trade structure. Paul gave me a set of screenshots and asked … Read more
I have some older content that I don’t have in any post so that’s all getting dumped into this post. I hope you find it worthwhile. 2021-08-16 Monday (1) I established a bearish position in SPX on Friday afternoon by buying Sep3 Put Vertical Debit spreads. I already own some DH’d bullish positions in Oct … Read more
Note: I added an update at the end so make sure you read the entire post! If you listen to most ‘experts’ they’ll tell you to spread out your risk by placing many smaller trades to reduce your exposure. I used to do that until I realized that was exactly the wrong advice for me. … Read more
In the past I’ve highlighted many times the importance of the 8 and 20 SMA bands for analyzing price action. I’ve just recently introduced you to the 1.5 standard deviation 20 SMA Bollinger Bands. The Bollinger Bands can add another dimension to your analysis because many of the strongest directional moves occur well away from … Read more
Below are the building blocks for a two trades; the Condor and the RS+. Positions can be built through multiple transactions or they can be initiated as a completed spread. Starting with just the long option allows for the fastest Delta Hedge towards a zero cost position because it takes the greatest Delta risk at … Read more