Options Trading
My Biggest Trading Lesson
I was only 19 years old when I made my first trade. I had a gut feeling the market was going to go higher… so I invested $600 into the S&P 100. A few hours later, my money had more than doubled. I sold my position and took the $1,200 profit – a 200% gain. […]
If You’re Buying Stocks When The Market Opens, You’re Probably Missing Out On The Best Returns
Buying the right stocks is important. Buying them at the right time is just as important. Today I want to talk about using historical data to pinpoint the best times to buy and sell in the very short term. We have a lot of data at our fingertips. With it, we can learn things like […]
Why You Should Be Trading 0DTE Options
Short-term options trading has exploded over the last few years. It started with the creation of weekly options back in 2005, which are options that expire every Friday. These options are available on many individual stocks and ETFs and can provide quick returns for active traders. With the explosive growth of Weekly Options, exchanges have […]
Here’s What Makes A Good Trade
What exactly is a good trade? If you ask most people, they’d probably say that a good trade is one that makes money. Obviously, there’s a lot of truth to that. If you’re losing money trading, then things clearly aren’t going well. But it’s not always quite that simple… Here’s another truth – not all […]
Don’t Forget – Options Are Meant To Reduce Risk
I have a good general rule for life… “Don’t be stupid.” And this rule is especially good for option traders. Like most good rules, though, we don’t really understand their importance until we break them. And when it comes to trading options, doing stupid things can be an expensive lesson… This post originally appeared at […]
This Indicator Warns Of Tough Times Ahead
High yield bonds just fired a warning shot. The action in the junk bond market tells us a lot about the average investor’s willingness to take risk. That, in turn, tells us about the potential for a rise or fall in the stock market. When high yield bonds are rallying, it’s a “risk-on” environment. That […]
Strategic Buy And Sell Indicators For Traders
Successful traders rely on proven indicators to make trading decisions, and the most powerful among those used as buy and sell indicators. These tools can help you identify trends, predict market movements, and determine the best entry and exit points for your trades. Technical Indicators Covered Price Action Signals Moving Average Signals Stochastics Signals Day […]
How To Trade Zero Day Options
They’re back! The speculative trading frenzy that dominated the markets’ during 2021, and then went into hibernation during the 2022 bear market has reemerged. The piling into meme names, FOMOing, YOLOing, bidding up shares of money losing companies, even those bordering on bankruptcy, and squeezing shorts with single day moves in excess of 20% are […]
Steps To Follow While Options Trading
62.58 billion. That’s the total number of futures and options contracts traded globally in 2021, according to data released by the FIA (Futures Industry Association). That’s up 33.7% from 2020. Last year was the fourth year the “global exchange-traded derivatives markets set a record above the prior year in terms of total trading activity.” These […]
Debunking The Myth That 80% Of Options Expire Worthless
Nearly all of Options360 trades come in a type of spread. I believe it’s crucial for positions to have some element of premium collection in order to generate consistent returns. However, a persistent and pernicious myth regarding options is that 80% of all options expire worthless. The number belies the fact that most options get […]
Let Price Action Show You What To Do In An Approaching Bear Market
Traders have access to an overwhelming amount of market indicators. But does a trader really need any of these indicators to be successful at trading? At the end of the day, the price determines our loss or profit. Therefore, we should focus our research on price action rather than time lagging indicators or market fundamentals. […]
Understanding Risk-Adjusted Returns When Trading Options
My articles this week on calculating a Twilio (TWLO) profit and Capital One Financial (COF) loss continue generating questions on how profit and loss calculations are applied to overall returns? So, I’ll dive a bit deeper into the topic. It’s a well-known investment maxim that risk is correlated to reward. But, when it comes to […]
How To Make Triple-Digit Profits With Options
Once you start looking for option trades on your own, the most important thing you can do to find trades with triple-digit profit potential is staying up on the news. The market and stocks in general move up and down over time, and the key is to identify these cycles. You will learn to decipher […]
Why Successful Traders Make More By Trading Less
During my 25 years of trading and mentoring others, I have been dragged through the coals a few times. And by that, I mean I have: blown up a few trading accounts; had some massive gains only to watch them turn into worthless penny stocks, and; I even had one trade based around the volatility […]
Stop Trading Options Like Stocks (Gamestop Example)
“Options are the same as stocks, just cheaper!” Ever heard a pitch start like that? Well, it’s wrong. Crazy wrong. Options trade much differently than stocks, and thus why it’s easier to lose money with options (and this is coming from a 20+ year options trader). One key difference is… Find out here This article […]
Using Options To Help Predict Big Market Moves
Options order flow, particular large or unusual block trades, can potentially help traders predict where a big market move may occur. Large traders will often use options on ETFs in order to take a directional position on a major asset class or industry. For example, using the iShares iBoxx $ Investment Grade Corporate Bond ETF […]
How To Profit During October’s Earnings Season
It’s been a tumultuous 18 months since Covid first descended, roiling personal lives, businesses, and the markets. While things keep continually flowing, we humans (prisoners to time), like to mark the days segmenting periods in order to assess past actions and set future goals. Today marks the end of Q3, as September proved to be […]
Using Options To Protect Gains While Maintaining Upside Potential
The stock market is hitting all-time highs and investors are torn between the possibility of an economic downturn, or entering a new leg of the bull market. Last week’s article noted that money managers were increasingly using call options to gain additional exposure to the stock market. Some of this behavior might be deemed as a reckless […]
2 Distinct Concepts That Options Traders Need To Know
Market volatility is starting to tick back up as macro headlines from Iran/Iraq come in. And now we are about to enter earnings season, which not only will cause big moves in the individual names, but over the past few years, has proved to be a volatile first quarter. More specifically, on individual names that are […]
How To Read Options Activity For Clues To A Move
Using option activity as an indicator of impending price moves is difficult, subjective, and unreliable. That being said, it can help confirm other indicators and increase the probability of a profitable trade. Indeed, there have been many situations in which activity in the options pits accurately predicts or presages an impending price move. There are […]
The 6 Rookie Mistakes Options Traders Should Avoid
I thought this would be a good time to review some of the common mistakes traders make when using options. As shoppers have become increasingly savvy in finding online bargains and discounts, we see similar behavior spilling into other aspects of their lives. This includes investment advice and stocks they seek. But sometimes it’s better to […]
