In this second article about debit and credit spreads we will discuss when you might want to use a debit spread over a credit spread or vice versa. To review, we previously discussed the fact that there really isn’t a meaningful economic difference between a credit and debit spread on different sides at the same strikes. It just comes down … Read More
From The PlayBook: Trade a Bigger Account
This latest excerpt from The PlayBook comes from Chapter 9: “Iceman: No Guts, No Glory”: — So let’s say that now you can risk 30 percent of your intraday stop loss and hold for the real move. Next you want to get even bigger. At this point, most incorrectly focus on adding share size. So if 5,000 was your biggest position, you … Read More
Is Options Trading “Better” Than Stock Trading? Discover the Critical Differences
How does option trading differ from stock trading? This is a great question to ponder as you start to look at the options world. There are many differences due to the makeup of options and there are similarities as well. So let’s take a look at the similarities first. When you buy a stock you want to sell it at … Read More
Credit Spread or Debit Spread: Which Options Trading Strategy is Best for You?
Is there a difference between a credit spread and a debit spread? Of course you might answer that you receive a credit for the credit spread and pay a debit for the debit spread, right? Well, you might come to find out that it is never as simple as one might think with options trading. Let’s take a look at … Read More
Accelerate Your Options Trading Journey: Join a Mastermind Group Today
Have you ever joined a trading group? You know, the kind that meets once a month in your local town or maybe an online group or chat room? Are these groups a good idea and can they really help you? Well, it really depends on what you are looking for. In his book High Performance Trading, Steve Ward writes “There … Read More
From The PlayBook: Reasons2Sell
Here’s our latest excerpt from The PlayBook. It comes from Chapter 3: “The Day Knight Capital Almost Fell (A Support Play)”. The chapter begins with a question: “How Do You Know When to Sell a Winning Position?” Dear Mike, I recently read One Good Trade and found it a quality read relative to all other books I’ve read. It has been … Read More
Assessing Risk: Trading Index Options vs. Stock Options
How do we choose the perfect security for trading options? The evolution of options trading strategies will continue to expand but the one thing that will never change is the relationship between volatility and risk when assessing your next options trade. One of the considerations when trading options is what underlying vehicle you should trade. Should you trade options derived … Read More
Options Trading as a Career: How to Find it
What does it take to become a successful options trader? This is a very complex question, but we will try to give a few brief thoughts on the subject. Most people believe that to be a successful options trader, it simply requires learning one of the many options trading strategies that provide the trader an edge over the market over … Read More