SMB’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the community will meet online for the primary purpose of watching live presentations made by outstanding veteran options traders and experts in the world of options trading. This week, Mike Adam, who works with Charlie … Read More
December 55 day $RUT bearish butterfly options trade: The finale
On Wednesday, the market gapped down and continued it’s downward trek of the previous 5 trading days. According to the guidelines of the bearish butterfly strategy, the reduced profit target of $1000 comes into effect 21 days to expiration on this lot size. As 21 days to expiration was yesterday, and the position was up $1800, I previously stated that … Read More
Free Options Webinar–Today at 5PM EDT: The RSI Indicator and Credit Spreads
Tuesday July 19, 2011 5:00 pm Eastern Daylight time SMB’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the community will meet online for the primary purpose of watching live presentations made by outstanding veteran options traders and experts in the world of options … Read More
What is your “bread and butter” options trade?
Yesterday we held our second Options Tribe webinar on the subject of an SPX butterfly trade that I was involved in developing. This trade has become my “bread and butter” trade –the approach that I am comfortable trading under almost all market conditions and which provides a stable pattern of returns. Almost every great options trader that I know has his … Read More
The Right Way to Adopt a New Options Strategy for Your Playbook
In our last blog post we discussed the reasons that options traders should take it slowly when adopting a new income strategy. Here are some simple steps you can take to assure that your adoption of a new options strategy is sound: Communicate with the developer of the strategy and see if he or she is still actively trading the … Read More
Are you REALLY willing to get back on the horse?
In Friday’s options post, we talked about the tendency of options traders to become enamored of a particular strategy simply because the trader is on a brief winning streak with that specific strategy. This propensity is particularly dangerous because market neutral income options strategies typically are entered monthly. So even a mere four month winning streak—only four successful trades in a row–allows … Read More
One Sure Way to Blow Yourself Up as an Options Trader (or What Happens When You Try to Steal Candy from the Wrong Baby)
In a speech delivered to the American Enterprise Institute in late 1996—in the middle of the formation of the dotcom bubble of the 1990s—then Federal Reserve Board Chairman Alan Greenspan coined the term “irrational exuberance” to describe an illogical optimism about the economy that was pumping up stock prices well beyond any reasonable level. History shows that he was correct, … Read More
“Going to School” on Experienced Options Traders
This blog entry is the introduction to a series of posts about common mistakes made by options traders and how to avoid them.