The Secrets to Locking In Profits for Option Traders
Earlier, I had a motivating talk with an option's investor who is still looking for for the key strategy to earning constant returns with option investing. He understood several things which were so well-known to me also.
The topic that really hit home for me was when he mentioned "Non-directional option investing doesn't mean we should generate return on investment in each and every direction. It means that we generate a profit if the asset doesn't move in any direction. In a few words, it's actually a directional strategy, sideways." This is absolutely the truth, and most investing programs say that it's easy to manufacture a profit with options simply because we can generate money for each and every direction. This is true in some viewpoints and false in others.
Investors using Condors as their main strategy understand what I am saying here; especially if you are investing in the Iron Condors which most schools and written materials preach. If you are investing with this option spread this year, you most probably aren't earning much. This is because that the Iron Condor is just as directional as the other option spreads only that it's direction is sideways. To most, it's just as difficult to forecast a non-move in the market as it is to forecast market that will be moving.
Over the last few months I have had many phone calls from option traders losing most of their trading capital with Condors and Credit spreads. They all have said one thing in common: "I was making great returns at first, and then one day, I lost most of my money." I've heard this tale many a time.
This is the reason why I don't push the popular Iron Condors, Bear Calls or Bull Puts. If you are a couple days from expiration, and the RUT is really near the sold strike, then at that moment you are in a very risky position. I'll remind you that this is the same risky method that many other investors are using to manage this option spread. Shortly all of your friends will be hearing the same story, but you won't be sharing this news with your wife! You smile at the moment, but you won't be if it happens to your trading portfolio. Another sad thing about this investng style is that the fear level is so astronomical that it really hurts your personal life. It makes it tough to sleep or even just relax each day.
Well, San Jose Options Mentoring has really changed the Condor and Credit Spreads that the usual investor is attempting to trade today. While others come into expiration sweating it out, worrying about the market moving past their short strike, we are relaxed, sleeping at night, and trading options in a much safer environment.
Our safer method of trading speaks for itself, but we have also developed another method that is very exciting to share with you. For most option strategies we trade, we now have a way to lock-in the profits and stay in the trade to make more. This is a great technique to use as an investor.
There's yet another technique we've developed that I'd like to mention before we go. Every trader has some trades that don't work out right? Well we obviously do too, but in our case, we usually end up with a Bonus Trade which gives us a chance to make back our loss with very little or no risk at all. It's these little details to trading that make all the difference at the end of the year.
So winner or loser, we have developed a pretty nice way to trade Iron Condors as well as many other strategies. - 23311
The topic that really hit home for me was when he mentioned "Non-directional option investing doesn't mean we should generate return on investment in each and every direction. It means that we generate a profit if the asset doesn't move in any direction. In a few words, it's actually a directional strategy, sideways." This is absolutely the truth, and most investing programs say that it's easy to manufacture a profit with options simply because we can generate money for each and every direction. This is true in some viewpoints and false in others.
Investors using Condors as their main strategy understand what I am saying here; especially if you are investing in the Iron Condors which most schools and written materials preach. If you are investing with this option spread this year, you most probably aren't earning much. This is because that the Iron Condor is just as directional as the other option spreads only that it's direction is sideways. To most, it's just as difficult to forecast a non-move in the market as it is to forecast market that will be moving.
Over the last few months I have had many phone calls from option traders losing most of their trading capital with Condors and Credit spreads. They all have said one thing in common: "I was making great returns at first, and then one day, I lost most of my money." I've heard this tale many a time.
This is the reason why I don't push the popular Iron Condors, Bear Calls or Bull Puts. If you are a couple days from expiration, and the RUT is really near the sold strike, then at that moment you are in a very risky position. I'll remind you that this is the same risky method that many other investors are using to manage this option spread. Shortly all of your friends will be hearing the same story, but you won't be sharing this news with your wife! You smile at the moment, but you won't be if it happens to your trading portfolio. Another sad thing about this investng style is that the fear level is so astronomical that it really hurts your personal life. It makes it tough to sleep or even just relax each day.
Well, San Jose Options Mentoring has really changed the Condor and Credit Spreads that the usual investor is attempting to trade today. While others come into expiration sweating it out, worrying about the market moving past their short strike, we are relaxed, sleeping at night, and trading options in a much safer environment.
Our safer method of trading speaks for itself, but we have also developed another method that is very exciting to share with you. For most option strategies we trade, we now have a way to lock-in the profits and stay in the trade to make more. This is a great technique to use as an investor.
There's yet another technique we've developed that I'd like to mention before we go. Every trader has some trades that don't work out right? Well we obviously do too, but in our case, we usually end up with a Bonus Trade which gives us a chance to make back our loss with very little or no risk at all. It's these little details to trading that make all the difference at the end of the year.
So winner or loser, we have developed a pretty nice way to trade Iron Condors as well as many other strategies. - 23311
About the Author:
Ready to lock in those profits? Better your Option Trading Skills today by visiting San Jose Options Mentoring online at www.sjoptions.com. Visit today and get a Free Video on Option Greeks, a $200 value absolutely free!
posted by Mr. Forex at
7:23 AM
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