Don’t Roll Your Short Option Too Soon

option

There are lots of mistakes you can make as an option trader, let alone as a human being. Let’s be honest, some just can’t be helped. But you can prevent rolling a short option too soon if you practice a little patience. Let’s take a look at what I mean by that. Short Premium Selling […]

Consider Option Collars in Earnings Season

collars

The market has been moving higher and implied volatility levels have continued to drop. These are tough times for premium sellers. Adding to the potential frustration is another round of quarterly earnings. Selling a call to help finance a long protective is always a good idea, in my opinion. Generally, collars are used by investors […]

Bear Call Trades on SPY

trades

I have this saying when it comes to technical analysis that goes like this: “What has a better chance of happening”? What I mean is, based on support and/or resistance, what does the underlying have a better chance of doing? Now let’s be clear, there is not always a definitive answer to that question. But […]

Implied Volatility Can Be a Bull Put’s Friend

volatility

Implied volatility has been predominantly low up until this recent sell-off in the market toward the end of September. With this sudden drop, IV levels and option prices have surged higher to levels not seen since late May This increase gives an edge to option sellers, and the potential decrease, can help them as well. […]

Are You Guessing Too Much as an Option Trader?

guessing

If we are being honest, there is a lot of guessing when it comes to trading. As technical traders, our goal is to put the odds on our side. We know that if we do, we have a better chance of being successful. That said, there is still some luck involved pertaining to how the […]

Taking Option Profits Sooner When Appropriate

profits

I think most option traders consider this a very volatile market, and they have for several months. When to take profits can be difficult to determine, especially in an environment like this. One of the hardest hurdles I had to overcome as a retail option trader was not taking profits too soon. I was scared […]

That Voice Inside Your Head

voice

We all have sayings we love to repeat to ourselves. And when we say them out loud, let’s face it, it can be irritating to others. That is actually my goal when I repeat certain sayings to my students. I want them to be annoyed with me and finally listen and adhere to what I […]

Option Vega Can Be Tricky

vega

The market can be very volatile, and if you have traded at all over the past several months you know that very well. As an option trader, you probably are and definitely need to be familiar with how implied volatility changes can affect option prices and the way you think about different strategies. Let’s look […]

Patience and the Market Close

patience, market

Let’s discuss something I talk about every single day in MTM’s group coaching class. To me, it is vitally important as a technical trader. When the market closes, there is never a guarantee it will open higher or lower the next session. That is a major concern if you hold a position overnight, which we […]

Option Trading Requires Both Experience and Common Sense

experience

One of the first things I tell my one-on-one coaching students is the one thing I cannot teach is experience. That they must achieve on their own. And it goes without saying that common sense is not easy to come by for many individuals. But you need both to give yourself a chance to extract […]

Bull Calls Are Bull Puts

bull

Here is a brief lesson on why, synthetically, vertical debits are equal to vertical credits. What I mean is that a bull call is the same as a bull put and a bear put is the same as a bear call. This is a lesson I teach all my one-on-one students because it is an […]

Don’t Let Those Bid/Ask Spreads Fool You

spreads

The market has been on a mission moving higher over the past several months, and implied volatility (IV) levels have continued to drop. That is not a good thing for option traders who love to sell premium. But what is good is that the bid/ask spreads tend to be tighter when options are cheaper. Sounds […]

A Look at IV Levels Around Earnings

earnings

If you don’t trade options over earnings announcements, you may have not noticed what happens to implied volatility (IV) levels. Usually an expected volatility event like earnings increases the price of options. In other words, when implied volatility increases, so do option prices. That can give an option trader an edge, but that edge is […]

Put in Those Profit-Taking Orders

profit-taking

Here is a quick post to follow up on the recent one I did on several things you can do that can 100% improve your trading. Another simple thing you can do is to put profit-taking orders out there as soon as you enter a trade. Better Chance of Getting Filled Think of it this […]

Is Option Trading a Losing Game?

trading

Have you ever heard that options are risky? I am sure you have. Have you also been asked if you have made or can make any money trading options? I am sure you have as well. When people ask me if trading options is worth it, I give them my standard answer. I tell them […]

Structuring Your Option Trading Day

trading

It seems like I always get asked about how I conduct my trading day. Clearly, a lot of factors go into that decision, but there are more than just a few constants. Here are several in an abbreviated form to give you something to chew on for your trading plan. General Market Conditions Take into […]

Tighten Your Credit Spreads

spreads

I always like to say there are two things an option trader can do that can 100% improve his or her trading. Of course, there are more than that, but the two I am referring to are not subjective at all. In this post, I’ll address the first one, and at a later date we’ll […]

Get Friendly in Your Trading

trading

Trading can be a very lonely undertaking. As a retail trader, you may sometimes feel like you are on an island because you have to make all the decisions yourself. Obviously, there are good things about that too. You are your own boss…hooray! But this mentality feeds into why extracting money from the market can […]

Stressing Out as an Option Trader?

stressing

Have you ever heard that stressing out is not good? Of course, you have! There are numerous emotional and physical disorders that have been linked to stress, including depression, strokes and heart attacks to name a few. While stress can be a motivator, it can obviously also be very harmful. It’s important to recognize the […]

Know Your Option Delta Basics

option

Over the past several weeks, I have been working on writing my PowerPoint presentations for our annual option training retreat. Of course, I am reminded of several topics I need to focus on during the retreat but also in my daily lessons with traders. Management has always been priority number one for me, but I […]

Make This Your Option Trading Mantra

mantra

You have seen posts from me like this before, but the lesson cannot be taught enough. I have a mantra I like to use in my Group Coaching class and with one-on-one coaching students, and I repeat it frequently: “Know exactly what you will do no matter what happens.” Simple enough, right? What I mean […]