In this scenario you buy - or hold - the dips. Come along with us on our journey to demystify the complex yet rewarding world of options trading. If the market is going up, I buy calls or sell puts. It seems to me SPY works the best, esp with an account under 25k that way you choose best 3 trades in a week rather than jumping into every setup. I sell naked puts and calls on spy.. I know this may sound obvious, but other services offer trades because they promise a specific number of trades on a weekly or monthly basis.
For traders with high conviction that SPY will sell off during the course of any given week, a short-term options trade can be quite profitable. Finally, in terms of both win rate and average return, SPY put .
Want to add to the discussion?
It's a good problem to have but one you should be prepared to face. Thanks again for your response! I trade SPY options. I trade weeklies that are expiring, near the money, and in bundles of usually. I can hold from 5 minutes to 5 hrs, but don't hold overnight. I only buy options, drawdown is too much for me to sell. I'm pretty much scalping, but if I quickly get some profit on the trade I'll stay in for the ride.
And I'm stupidly using ToS. I like the volatility and pricing that happens later in the week. I noticed that paper accounts will just excute the trade; while in real life sometimes it takes the market a few seconds to decide where it wants to price. You can get burnt in a wide market and market orders, conversely, limit orders can be slow to put together and track price action in a quick moving market. Figure out a system that works for you.
Personally I map the options that I'm looking at to a 2 grid window, each option has a chart, active trader, and time and sales. I have it set up with active trader for 1 click trading for a variety of orders. Where do you get your level 2 quotes I'm going to guess TOS?
I realize that paper account execute trades instantly. For this reason, I would also put my limit order below the market price even in paper trading to simulate this fact. I don't use optionshouse that much, I'm using suretrader. It's even worse, can confirm. I use it because it allows me to circumvent PDT rules. I've had this happen to me way too many times, and I end up bagholding - thankfully it's just paper trading.
Any other good indicators that can help prevent these false positives? No, use historical volatility to forecast potential pivot points. Break that range into 4ths, and if you extend those ranges up and down, youll see theres lots of activity near them.
Right now im just trying to figure which pivot points are more likely to give a rebound. Im thinking it has to do with some economic events,earnings, news releases. This is a chart of TD. This chart was done maybe back in august? So, while i have no clue which one its going to pivot off of, you can see that it does generally pivot off these levels.
Thanks for the example! I am using tradingview right now as well not TOS , and I like it a shit ton. Theres 6 pivot points here all the way to zero. So ideally, youd average w. However, I think if there is a rally this week, itll Very nice, I just wish one could draw lines in tradingview but it's pretty sick as it is.
Has this situation ever happened with you, and do you have any ideas on how to avoid such false positives? You CAN draw lines in tradingview. You can add indicators and w. There is nothing you cant do. Its all just guess work and probability.
The only way to counter this is to manage your position size going in and ensure you have preset prices for entry ahead of time. That way, if it does move there, you know you were half right and will have a position. The other half is uncertain and is dealt with position size. So youd have to lose times back to back to drain your 5k account. A better way to YOLO, is take your max amount you're willing to lose. However, such volatility also means huge returns for our winners, as our model portfolio shows.
Often the greater the risk, the greater the potential gain, and that is true with our approach. But as our model portfolio shows there is the potential for great rewards with this approach. We discuss what we are planning to do in our one of a kind SPX Daily Outlook that is sent to all our members daily.
Our exit times vary based upon market conditions, but we are always out of the trade by the close of the day. Our members receive our newsletter each morning within minutes after the opening bell. We also provide the SPX Spread Trader which is perfect for those who want precise entry and exit prices. Our approach requires that a trader is prepared to purchase put and call option contracts and have the ability to respond quickly.
We share what we will be doing in the day ahead, and how you respond is up to you. Some seek to mirror our trades, others seek to improve or even develop their own strategy using ours as a baseline.
TRADING STOCK OPTIONS
Oct 10, · The best part of trading SPY is low IV. You get the most for your buck. SPY moves slow, not like FANG which requires patience. Even numbers can be used as a support and resistance. I have text alert for tick or + tick readings. I fade these extreme readings. one last thing darwin; if selling puts or calls working for you then stick with it. Our weekly options trading strategy allows us to make extremely profitable trades with only a single trade per day. We trade highly volatile and highly liquid SPY and SPX weekly options. The market was transformed a few years ago, with the introduction of weekly options. The options butterfly spread is a low-risk options trading strategy that stands a high chance of producing a small profit. The butterfly options trading strategy uses four options contracts to produce profits off of price stable markets.