Stressing Out as an Option Trader?
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
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
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 […]
Volatility and Vertical Debit Spreads
Let’s start with something simple that most option traders know. Long options, such as long calls, have limited risk. The purchase price is the risk on the position. One of the many reasons traders love options so much is that they are usually far cheaper than buying 100 or fewer shares of stock. But sometimes […]
Use a Spread to Offset Positive Vega
The market has been a volatile machine as of late. Option prices and implied volatility levels have moved higher in response. That said, implied volatility and option prices are destined to come back down again if and when the market rallies. Generally, IV levels move higher when the market drops, and IV levels drop when […]
Successful Option Trading Is Not Easy
As a young retail option trader, one of the first things I did was buy an options program called “Options Made Easy.” Some of you may remember it from back in the day. It had three sets of red, yellow and green lights to guide you as an option trader. On the surface, it seemed […]
Don’t Forget About Long Calls and Puts
One thing that annoys me a bit is when option traders refuse to consider buying a call or put, no matter what. Granted, I only use long calls and puts in certain situations, but I will still buy them. Here is a brief reminder to all option traders who have abandoned buying calls: Please don’t […]
Your Trading Business
I was asked last week what a trader should look for in selecting an options broker. That really got me thinking about what a trader needs to trade. Here I’ll share my thoughts. Running Your Trading Business Think of your trading as a business. Then think of the different functions that business requires to perform […]
Should You Adjust the Trade or Move On?
Here is another short post on something I feel strongly about. The reason I bring it up now is because I have had back-to-back discussions about the topic with one-on-one coaching students recently. Both of them asked, “If you have a losing trade but it looks like a good setup again, should you take it?” […]
Have You Written Your Trading Plan?
On a recent Saturday morning, I did a webinar on the psychological aspects of trading. Without a doubt, trading psychology is my favorite topic to discuss, and in my opinion it’s the most important by a mile. It is a topic most traders realize needs to be addressed but usually do not want to think […]
No IV Skew? Try an Iron Condor
I love to find opportunities where I can buy calendar spreads for a neutral bias. In fact, we have feasted on them in MTM’s Group Coaching class for a long, long time now. The most important part about a calendar, whether it be neutral or directional, is that the underlying is trading as close to […]
Mind the Gaps When Trading Options
This market remains a volatile beast, gapping higher or lower practically every session. We are also almost through another round of quarterly earnings, which always seem to create potential for large gaps. I think many of us can agree that the first 30 minutes of the market can be very volatile because of a volatility […]
Take Nothing for Granted When Trading Options
As market volatility continues, here is a quick reminder to be cognizant about removing risk. If you know me, you have probably heard me say (at least a thousand times) to think of yourself as a risk manager first. But many times we take that for granted, especially when it comes to options. Let me […]
Directional Butterflies, French Physiologists and Bending Spoons with Your Mind
I can read minds. OK. Not really. But, hey, wouldn’t some of that sixth sense stuff be great as a trader? I actually traded with a guy on the CBOE trading floor who said he could bend spoons with his mind. True story. I never saw him do it, and let’s just say I had […]
Make Some Option Moves at the Close
This market has been a volatile beast with almost every day filled with decent to large moves. Let’s be honest: It is hard for a swing trader to get an advantage with those moves. Obviously, when the market closes, there is never a guarantee it will open higher or lower the next session. If we […]
Profit Taking Orders Are Mandatory
There is a lot of subjectivity in life and in options trading. In both, there are lots of choices with many potential scenarios. As any trader knows, there are also lots of judgment calls and not a lot of certainty when it comes to options. There is, however, one move that can 100% improve your […]
Get Technical Edge on Your Trades
Here is a really short blog about putting the odds on your side as a trader. You have heard me talk about this many times but it needs to be repeated often. What has a better chance of happening? Do you ask yourself that enough when looking at charts? If you don’t, then why not? […]
Waiting Out Your Theta
“Please remain on the line and the next available representative will be with you shortly [elevator music resumes].” WAITING! Yeah. It’s annoying. But we have to do it. And when the wait is over, we finally get what we want…just like theta. How Does Theta Work in Options? The first thing we need to talk […]
Double Calendars Still the Ticket
If you have been in MTM’s Group Coaching class over the past several months, you have seen me model out several long double calendars…mostly on the SPY but on various other stocks and ETFs too. Some have done better than others, but overall double calendars have been profitable more often than not. The times they […]
3 Things Traders Who Know Everything Don’t Know
Have you ever met a trader who “knows everything”? Of course you have. Every now and then, you come across them on TikTok or YouTube. If you can’t already tell just from looking at them that they know everything there is about trading, don’t worry: They’ll tell you. Well, I’d like to share three things […]
IV for Options Is Dropping
I started out my Group Coaching class recently by talking about how it may be a bit more difficult to find option trades than it was a couple of weeks ago. As you know, everything in options trading is a trade-off. If the probability to make money is good, the risk/reward is not so good. […]