A common mistake that new and developing traders make in the options market is to trade strategies that involve high commissions relative to the earning potential. We often see newer options traders applying great options strategies to the wrong instruments. Option trading strategies that involve frequent management to control risk can be commission intensive. This is especially true if you’re … Read More
Turning a Bad Signal into a Winning Trade with the Right Strategy
Here is a case study in accumulating as many edges as possible to increase your risk adjusted returns. In the past, I have shared that most developing traders start by looking for the fastest way to make bigger profits. However in systems development we look for the highest risk adjusted returns. In this example trade, we are going to combine two … Read More
Who’s Running The Ship?
When you think of a large cruise ship and the way that it’s run. Who runs the ship, the captain or the crew? If you’re like most people you would say the captain….. and you’d be wrong. As you think about all the things that need to be done on the ship, keeping the engines running, taking care of all … Read More
December’s $RUT Bearish Butterfly Trade
One of my favorite options spread trades is the Bearish Butterfly. I developed this trade a number of years ago in recognition of the fact that no matter how much the market may rally, it will eventually experience pullbacks. So an options spread trade, developed to take advantage of these periodic pullbacks should work in most market scenarios. In the … Read More