Hi Mike, September 1st 2013 makes it three years that I have been trading full time. I’m writing this email to seek your experienced trader’s counsel. I don’t have any job and I’ve been thinking about my experiences trading, which for the most part have left me bitter. You must be wondering how I’m still continuing to trade after three … Read More
Understanding Call Option Dynamics When the Market Rises
When new traders first discover options trading they get excited by the leverage that buying options can provide. One call option contract allows you to control 100 shares of the underlying security. So instead of buying the stock on margin, you can buy an option using a lot less capital. This leverage attracts traders who have limited resources because under … Read More
Do Not Sell This Position
Hi Mike, First of all I would like to thank you for writing The Playbook! I’m not quite through it, but I’m already finding it extremely helpful and valuable. I wanted to share some challenges i am currently having regarding a situation where there is conflict between certain rules I follow for establishing when to close a position and one … 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
Lessons Learned From A Million Dollar Loser
Imagine that you’re on top of the world…You have achieved brilliant career success on the trading floor of Chicago; you sit on the important governing body of your industry; you’ve got a wonderful family; and plenty of toys to enjoy in your spare time. And then, in what seems like a blink of an eye, you lose it all. You … Read More
How Our Traders Deal With Random Price Action
Prices are random, especially on smaller time frames. So what to do? — Marc Principato, CMT, Risk Disclaimer *No Relevant Positions
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