Real-time options education and strategies
Below is the current SPX position in the account that I refer to as the PDT (Pattern Day Trader) account. It is a smaller account (less than $25K) that is limited to a maximum of 3 round-trip trades within the same day over a 5 day period. PDT accounts are especially well-suited to using longer … Read more
I’m just a student of Paul’s Vega Option’s method. But as I see it, the Vega Options strategy has three steps: One of the keys to successfully trading this strategy is understanding where your current portfolio is in this three-step process, so that you can have a clear understanding of what is driving your trade. … Read more
One of my favorite and most profitable strategies is buying a directional Diagonal spread for a debit and then rolling that Diagonal into a Calendar spread when the opportunity to get to zero cost arises. Simple! No? Ok, let me translate that for you! It means when I can sell the Vertical spread that ‘converts’ … Read more
The title of this post is a little deceiving, it should read ‘Risk On…Risk Reduced’. The only truly ‘risk off’ trade is an exited trade! If that’s not clear what I mean by that it should be clear after you’ve read the post. Over a period of just less than 48 hours I made 7 … Read more
There are plenty of references to the RS+ trade on the blog and in my twitter feed. It’s certainly one of my favorite option structures. Basically, a RS+ is a version of a 1×2 (or 1×3) Ratio Spread in one expiry plus 1 (or 2) long options in a later expiry. It could also be … Read more
Over the years I’ve developed my own methods of analyzing price action and that has helped me stay on the right side of the trade most of the time. Of course there are going to be failures along the way that aren’t necessarily due to a misreading of the chart but rather a news events … Read more
When I trade any short term time spread in SPX or SPY I almost always use the 3-day rule. When I say short term I mean that the expiration of both the spread’s short and long options is generally within the following 30 days. The 3-days refers to the amount of days between the expiration … Read more
Short post here about a trade that I made in AAPL today. I had a short setup on the hourly chart so I looked for a good option structure to trade. Here’s my tweet describing why I chose a Diagonal spread. The Put that I was selling was much more expensive than the one that … 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
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