Traders Ask: Is it better to buy options for swing trading profits, or sell options for time decay?

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Trader Sam asks: “Dear Sir: Allow me to ask a question about options, as I am a new trader: I have heard that delta neutral strategies are the best approach to trading options but I have less than $6,000. in my trading account and my broker’s margin requirements make it impossible for me to trade iron condors, butterflies  and other … Read More

Trader’s Ask: Why did I hit my stop much earlier than I thought I would yesterday?

Seth FreudbergGeneral Comments, Options Education, Seth Freudberg's Blogs, Traders Ask4 Comments

I had an interesting meeting yesterday evening  with SMB’s options trainees  reviewing yesterday’s meltdown and the affect  it had on their options positions.  We spent the whole meeting dissecting trades that the options trainees had made during the day. breaking down what went right and wrong with each one and why.    It was a great meeting–real traders faced with the … Read More

AAPL “unpins” at 3pm on Friday–problem or opportunity?

Seth FreudbergGeneral Comments, Options Education, Seth Freudberg's Blogs2 Comments

Options tribe member Craig Wassenberg  and I were corresponding as usual last Friday as the July monthly options expiration day had arrived. I asked Craig what he was watching  and his reply was not surprising–many of the usual suspects including GOOG,  AAPL  and BIDU. Craig was concerned  about trading  GOOG,  given its monster reaction to last week’s  earnings–not the safest environment … Read More

Options Tribe 2011-07-12: High Probability Income Positions

Seth FreudbergGeneral Comments, Options Education, Seth Freudberg's Blogs1 Comment

Options Tribe – July 12, 2011 Tuesday July 12, 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 … Read More

O Options Trader, Know Thy Vehicle

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

In yesterday’s Options Tribe meeting, tribe member Craig Wassenberg made an excellent presentation of his expiration Friday “pinning” trades. (For those of you who aren’t familiar with the term, a pinning trade is a trade that takes advantage of the tendency of certain stocks that become anchored to a particular options strike price on options expiration day.) It was an outstanding … Read More

Expiration Friday: Unveiling the Dramatic Conclusion of Pinning Trades in GOOG and AAPL

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On Friday we followed Options Tribe member Craig Wasserman’s thought processes and analysis as expiration Friday proceeded.  Craig had been watching AAPL and had become convinced that it was going to pin to 320. He reached this conclusion around 12:30 PM EDT. Craig entered an AAPL 320  iron butterfly trade shortly after making his call on the pinning strike of … Read More

Expiration Friday Pinning Trades in GOOG and AAPL

Seth FreudbergGeneral Comments, One Good Trade, Options Education, Seth Freudberg's Blogs, SMB FundamentalsLeave a Comment

The great thing about options is that they can be played in so many different interesting and creative ways. A case in point:  There is a cult of options traders who focus on the last two days of the monthly options expiration cycle.  These traders focus, separately, on  expiration Thursday trades and expiration Friday “pinning” trades.  The premise for each … Read More

Smart Thinking About Capital Levels and Simulation

Seth FreudbergGeneral Comments, Options Education, Seth Freudberg's Blogs, Trading Psychology2 Comments

One of the great things about our growing Options Tribe community is the number of experienced spread traders that are actively participating and communicating their thinking to us. This free exchange of ideas is what the Tribe is all about: the more that people share their perspectives and approaches, the stronger we all become as traders. Recently, I received an email … Read More