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
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
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
Even though K.I.S.S. stands for Keep It Simple Stupid it’s not my intention to refer to anyone reading this post as stupid! It’s a reminder to all, myself included, that we can often make things more complex than they really have to be. In this post I’m going to present a potential trade that was … Read more
This will be a short post but it’s an important one. I build reasonably large and often complicated looking positions in SPX. I do most of my larger trading in SPX because index options aren’t subject to the ‘wash rule’ (google it if you don’t know what I’m referring to) and they have better tax … 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
During the overnight session on 02/20/2022 the following setup in Bitcoin presented itself. I decided to do this post because the setup is as textbook as they come! All comments in this post are referring to the hourly chart but these setups work on all timeframes. First, price had experienced a sharp (impulsive) decline from … Read more
Almost every option ‘expert’ will tell you that any trade that has a high reward/risk ratio will have a low probability of profit or success. And they’d be partially right. But they wouldn’t necessarily be profitable. In fact, I think there’s a high probability that most high probability traders are not profitable in the long … 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
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