The Right Way to Adopt a New Options Strategy for Your Playbook

Seth FreudbergGeneral Comments, Options Education, Seth Freudberg's BlogsLeave a Comment

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

Options Trade Initiation: Why Patience Pays Off

Seth FreudbergGeneral Comments, Options Education, Seth Freudberg's Blogs, SMB Fundamentals, Trading Psychology1 Comment

When   developing   traders  enter into  income options strategies,  there is   a   tendency to  become  impatient  when   executing the opening trade.   The    trader   will   typically  put  an  order  in at  or around the mid-price but  often finds that the market  is  not  biting on that   price immediately.   This can create anxiety and a feeling of impatience in the trader,   arising   from the belief that,   since  almost … Read More

Irrational Pessimism

Seth FreudbergGeneral Comments, Seth Freudberg's Blogs8 Comments

While being irrationally exuberant over a short winning streak of options trades leads many traders to recklessly ramp up their capital levels leading to devastating, or even fatal, losses, there is an opposite problem, which is not necessarily fatal, but certainly leads to futility. “Irrational pessimism” is when you lose confidence in your trading strategy when there is no good reason to … Read More

Avoiding Pitfalls: Safeguard Your Options Trading Journey

Seth FreudbergGeneral Comments, Options Education, Seth Freudberg's Blogs, Trading Psychology4 Comments

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

Options Trade of the Week

smbcapitalMike Bellafiore's (Bella's) BlogsLeave a Comment

  Trade: 8/10/2010 WHR $86.07 Buy 2 August 85/90 call spread limit price $ 1.65 target 3.00/ by August 17th stop 1.10/or a stock close below 83 Reasoning: WHR- looks like it found some support in the 85 level the past few weeks. A move above the 87.31 level should see the $90 level quickly (same day or with a … Read More