How to Trade This Options Market

Posted on Thursday, May 30, 2019 at 4:25 PM

This is just a little blog to remind you about your options trading management. Everyone needs reminders, especially option traders. I will often say in my Group Coaching class to know exactly what you will do no matter what happens before you enter any trade. The same can be said about the trading environment we are currently in.

Not only is it important to understand the different option strategies and the option greeks, you have to know and have a feeling what the trading environment is so you can make more educated decisions as far as management goes. This, of course, addresses the most important part of trading in my eyes: management.

I take into consideration what the market is doing before placing a trade. I generally consider the market for about a third to half of my decision-making process. For example, if you are bullish to non-bearish on the market, I consider more bullish than bearish trades. If you are accustomed to taking profits over a certain length of time or a certain percentage, consider altering that especially when market conditions change. For example, consider lowering your profit potential percentage or time in the trade.

Understanding the market environment is just one of many things an option trader needs to know when he or she is active in the market. What it really boils down to is smart and active management and, to me, that is where money is made or lost more often than not.

John Kmiecik
Senior Options Instructor
Market Taker Mentoring, Inc.

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