An opportunity
It’s a rare situation when a rookie trader can find an experienced trader who will take the time to offer a clear and detailed reply to a simple options-related question. That’s one of the opportunities available at Options for Rookies Premium. The live Question & Answer sessions are designed to give you that opportunity. Ideally each member will have an opportunity to ask questions and receive an immediate reply during live sessions. If time permits, you will get to ask a follow-up question.
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hello mark..
i hope in this blog i will learn a lot from you.since you are a ironcondor trader,can i learn spread from you??
i am using spread weekly
my trade is based on simple criteria,but i want to know from your sight..
i have familiar stock that i used, i look at ma 30,50. that the way i take bearcall or bullput.
if in themiddle of the week,my is strike is hit,if possible i will roll the position,if not,i will take the lost..
i hope i will learn something new here,i am new,unexperienced trader..
thanx
Hello Soem,
We will be using iron condor trades frequently in the Track that Trade feature. The problem with that is that the trades evolve in real time and that requires patience. You can learn from each example when an adjustment is made. Or, you may suggest an adjustment. You may ask why an adjustment was not made. You may raise any other questions.
You trade the Weeklys, and I may try to use them as an example once or twice. I do not like trading these, I do not recommend these options to anyone and thus, unless several members REQUEST my use of Weeklys, I cannot do it often. I believe these plays have too much risk and I have not found any suitable trades with which to experiment.
Weeklys are just different. You have HUGE negative gamma when things go wrong. If you wait until the strike is hit (and that’s your choice), it becomes very difficult to do anything other than exit. Weeklys are nearer to gambling than investing.
Gold Members: If you are interested in Weeklys options, please let me know by commenting right here.
Soem, this is an educational experience and for members. Trade management and risk management are far more important than choosing the entry point. What I CANNOT do for you, or anyone else, is teach you how to time the market or enter the trades at the most opportune time. I don’t know how to do that. That means, I do not use moving averages or any other technical methods for choosing entry points.
‘My sight’ is somewhat random. I do not worry too much when entering into trades. That’s the truth and I know that very few people operate that way. But I do. That’s why it is not something I can, or want to ‘teach.’ I hope to help you maage your own positions.
But you can do so. I am not going to pick THE trade for you to make. I am going to pick a trade that should be good to track. I am hoping to get a chance to make money-losing adjustments. I am hoping that the trades go badly and provide a number of learning experiences. There is nothing to be learned when the trade is opened one day, closed aone month later, and you take a profit. That’s YOUR goal when trading for your account.
Making money is not my goal when following trades. My goal is to experience decision points. My goal is to help you understand how to make those decisions and choose from among several adjustment opportunities.
In my opinion, the best way for you to learn more about iron condors is to go through The Rookie’s Guide again. Slowly. When something is not clear to you, come to a live meeting (I know your time zone is 12 hours different) if possible and ask. Or post questions and I’ll do what I can to help you understand.
I hope to prepare a video course on iron condors, but there is no way for me to do that anytime soon.
Soem, one of the problems is going to be that each member wants what he/she wants. It is impossible to deliver that. I hope to take questions of general interest and teach one short lesson at a time. I course is the best way to gain a general education and I am preparing one right now. It takes time.
Regards
Mark, I guess it would be interesting to hear your experience with all positions, not just short ones. High gamma compared with overall low IV look like a good long straddle/strangle candidate. I would also appreciate to hear your thoughts on exp. friday trading, strike pinning effects and so on (ive read Jeff Augen`s book on that matter recently)..
Looks like I never can put all my thoughts in a sigle post. haha
I guess it would be also quite useful, besides following single positions, to understand how to evaluate the whole portfolio.. i.e. a single IC can be a good trade, but many different ICs will give us too much short vega..
I agree that portfolio evaluation is worthwhile. I had not considered doing that for the smallish portfolio we will be carrying.
These are all topics worthy of discussion. Thanks.
Referring to my experience, trading as a market maker is very different from methods used by individual investors. And the truth is that it was long ago and my memory is fuzzy. I
‘d be happy to talk about long positions, assuming you are referring to owning options. The problem is that I strongly discourage traders from using those methods, and that makes it difficult to speak of them. But I will not ignore your questions and will find some appropriate place to speak of positive gamma. My experience is with backspreads, never with simple long puts or calls.
I never trade expiration Friday.
I believe ‘pinning effects’ are negligible and that pinning is a myth that will not die. But, we can discuss. Thanks for the ideas.
Hi, I loved reading your article. Great info on trading. Do you have any specific info or tips for the newbies? Thanks in advance. Kind regards, Matthew
Matthew,
Yes, but there are so many tips I could offer. But these are not tips on how to ‘pick winners.’
Here are a few:
Don’t speculate by buying cheap out of the money options
Be very careful when determining how many options to trade at one time. Understand the worst-case scenario before making the trade
When you have a profitable trade – remember that it is your money on the line.
It is not house money
You earned it. It is yours
Treat it with respect
Most new traders fail to earn any money when trading. Thus:
Be patient with your education
Learn first. Trade later
Don’t take shortcuts. You have the rest of your lifetime to trade
It may be difficult to believe – but risk management is the key to your success.
Trading options is nothing like trading stocks
Never enter a market order. Use limit orders