Oex option trading strategies

OPTION HOUSE FOR MONTHLY SPREAD TRADES Report 30 Starting balance: Basically the bet is that the trend is down, for next two weeks or so. You need more index point moves to get dollar moves, for less TIME DECAY trade off. Posted by A Professional BEACH BUM retires in Belize! Though for a LOSS FREE trading system, money earner, I think I'm going to have to eliminate the taking of any position directional trades?

There were too many losses. It works, but the results were not consistant enough. One position directional trade loss can wipe out all the accumulation of months of small steady incremental profits from spread trading, small as they are.

It is more important in my mind, not to EVER have a losing trade. My goal is as far as possible a LOSS FREE trading system. I realize this strategies not totally possible, but as close to it as I can get, is the goal. For this reason, I'm concentrating on Vertical Credit Spreads, IRON Condors and IRON Butterflys. I have not even started to try, or study Butterflys yet.

These three systems are CREDIT SPREAD strategy systems. TRADES OPEN April 26th. I attempted to put a oex order, at. I don't know why? The 5 cents is too little. When the meat is in the trend position trading, in the first third of the trend BEFORE volatility drops off and it no longer is practical. There are only 6 to 8 trends a year, so there are not many high quality trades otherwise, that more or less guarantee winning.

That's the theory anyway. We shall see how it works out in practice. So it looks like in one month, I might like to do up to 8 Vertical Credit Spreads. If I can get a local faster internet service provider. In option meantime, will continue the practice and learning process using ThinkorSwim funny paper money account for another 6 weeks or so. Wednesday, Strategies 21, Report 28 Difference between CONDORS and IRON CONDORS. Something I did not know? The CONDOR spread is either the upper and lower channels only in CALLS, or in PUTS.

Whereas the IRON CONDOR SPREAD is the playing of; out-the-money, on the bottom of a channel, as in PUTS for a BULL move, or as in CALLS out-the-money, in a BEAR move at the top of a channel. In other words the VERTICAL BULL PUT Spread is on the bottom of the channel and the VERTICAL BEAR CALL SPREAD is on the top of the channel. Since so far, I always trading in, I hadn't made that realization.

I had not realized this difference. In fact, I had not even considered the CONDOR as something separate, much less a DEBIT SPREAD TYPE CHANNEL. So an amateur learns! Guess what I want are IRON CONDORS which are credit spreads and will remember that in future. Perhaps in the not too distant future I will study the IRON BUTTERFLY? It does sound like the IRON CONDOR and the IRON BUTTERFLY seem the best spread strategies? These are credit strategies. THE NUANCES OF VERTICAL CREDIT SPREADS report The NUANCES of CREDIT SPREAD VERTICALS Report 27 Option studying the Vertical Credit Spread, there are some misleading stuff out there.

It oex takes ONE TRADE in which the market sweeps through your CREDIT SPREAD to maximum destruction, to wipe out the small accumulation of profits you gained for the whole year. In a lot of Option SPREAD TRADERS got wiped out. They of course were pyramiding. They had to start back again from rock bottom. I've tried this in practice. It works out, but the CREDIT SPREAD is a low earner at the best of times, versus the money you have in margin at risk.

On the other hand, I've experimented paper trading and virtual account trading and there are some rules you can apply. A bull market goes trading more slowly than a BEAR down market. If you are going to be threatened, it is most likely a rapid DOWNWARD BEAR Trading drop will wipe you out. You will not have the time to place the order, or get it executed, Particularly in short term weekly trading expirations. Maybe in Longer monthly expirations? Mostly the problem is GREED and the tendency to keep pyramiding profits.

You should be taking money off the table, or out of the account regularly. In a BULL MARKET you can start entering your order, about 2 OEX points before your SOLD side is touched by the market action. In a BEAR MARKET plunge, you should be closing out your SPREAD at least 6 points away from your SOLD side being touched.

Better to end up with nothing, or a minor plus couple of dollars than lose everything? Narrow channels and weeklies are most dangerous. You don't have enough time! A Friday expiration that coincides with news reports can drop right out from under you and in such short term trading, will sweep through your bet so fast, all your profits for the year will be gone.

They cost a little more in commissions, but the data and detail and complexity of their software is outstanding. Also the deciding criteria was that I was going through eliminating any LOSING TRADE IDEAS. This is narrowing strategies through trial and error, to Option TRADING.

One of the most successful trading ideas was the VERTICAL SPREAD and since this is a non directional trade, within parameters, channels or brackets, works fairly well. Took some learning though, and I'm not sure I've figured out all the nuances yet. OPTION HOUSE do not offer them. The point in learning I was at, I just gave up, not wanting to fight with it anymore. I did not understand their figuring.

They are overloaded with cash traders, and do not have the time, to deal with the paper trading learners. So trying to figure out the complexity of their software - web based package is trading and slow for me. Been at it around two weeks now. Picking up tricks as I go along, but a slow process. Still, they are giving me the trading information I need to make a decision on when to go into CASH TRADING with my life savings.

Looks like about 6 to 8 weeks away, if I stay successful? There is still a lot to learn for me. I've decided to drop all directional LONG trades, or singles and concentrate on non-directional SPREAD TRADING. I've actually only learned roughly one method so far, the VERTICAL SPREAD, or at least half of this method.

They also have DEBIT VERTICALS, CREDIT VERTICALS, SINGLES, BACK RATIO, CALENDAR, DIAGONAL, STRADDLE, STRANGLE, BUTTERFLY, CONDOR, IRON CONDOR, VERTICAL ROLL. Right now I'm having trouble EXITING, or CLOSING the VERTICAL SPREAD on their web based platform, but did successfully close a long single PUT yesterday, entering the opposing trade. So I'm guessing it will be more or less the same for the SPREADS? Friday, April 16, Trade results of spreads, April 12th to 16th, Report Report 25, end of monthly expiration week of April 16th.

The BEAR MARKET or CHANGE OF TREND occurred. Made five Vertical Spread Trades and one Iron Condor channel trade. All were winning trades! I did one vertical with thinkorswim brokerage and this was more to test the ability to CLOSE out a Spread Trade. They were overwhelmed and unable to advise me, and I couldn't figure it out, so had them close the spread trade early for me. We actually closed it 3 index points away and received. The TREND changed on Friday and we will be going to a different strategy.

Probably LONG PUTS and a shift to VIRTUAL BROKERAGE TRADING as we gain more confidence in our decision making. OPTION HOUSE- Option House balance: Paper trading in Quickie Trading: They lose too often.

Haven't figure out how to close out trades in Sinkorswim brokerage yet and that will be the lesson for the coming week. In normal trading I would not have the capital beginning like this, to have the reserve margin, to put on so many trades at the same time.

So the result is distorted. Because of the Sinkorswim large account, I was able to put the IRON Option with 20 contracts, and the results reflected that improved earnings. I have mixed feelings about IRON CONDORS. Sort of thing to do, if the opportunity arises, but otherwise forget it, is my feeling. Debit Spreads haven't started studying them yet I'm also interested in eventually studying ratio spreads, diagonals and horizontals, and butterflies sometime.

Got too much on my plate right now, trying to learn and absorb this stuff above. I'm leaning toward concentrating on less risky, lower profit steady income flow from Vertical Spreads. Strategies know more after running this BEAR MARKET just started using some mix of Vertical spreads and long PUTS.

Trend longer trading 6 or 8 per yr hasn't started yet zero neutral. Thursday, April 15, Report 24 SHAKING THE MONEY TREE! SHAKING THE MONEY TREE - DAY TRADING! The sky is blue, low puffy white clouds and the atmosphere is clear after a morning shower of short duration.

You can see the cloud shadows moving across the green of the Yalbac Hills some 8 miles away across the Belize River Valley. Very pretty picture to the eye. Back to puzzling what the big guys are doing in Spread Trading?

I hope to get up to 20 contracts sometime this year, if not strategies far away. Currently trading my beginning trials I am buying Spreads that run between. A spread is where you sell some contracts and buy some contracts at a different price. There are guys on the brokerage that are trading or or contracts at a time.

I'm new at this and trying oex figure out the relationships of what happens, in the WHAT IF scenarios. I look strategies the quote machine and I am wondering what are oex doing? There are two kinds of markets, European style, which you must hold until expiration and American style, which you can close out anytime. From what I can surmise from watching the bid - ask quote board, the big guys are at least some of them trading for.

Meaning that if the market moves a point in either direction, the spread might widen by. There are options in a contract, so if you are trading contracts and you manage to option a spread at say.

I'm thinking with my fingertips here! Will go check on the fees and see how that works? I haven't found anything in the literature on spread trading on the web that explains this short term strategy. So maybe there is something wrong with my thinking?

On 5 contracts that would not be worthwhile I think. Let's see 20 contracts. So 20 contracts is workable. Have to think about that for a bit. The bigger the bet of course, the more the profit! Wednesday, April 14, Report 23 Figuring Vertical Spread margin. The learning experience continues! I was puzzling out what the margin requirements are for credit spreads.

I got really confused over it. Pete Stolcer a famous option guru with several websites on trading trading, I occasionally check for reference and teaching, one of his sites.

You can get a little picky here and subtract the CREDIT you receive from selling the TIME DECAY, which does not reduce it much. Huge potential loss, versus the profit. However, it is offset by the safety factor, if you figure it right. The only real threat I can see, is if the market makes a sudden BEAR PLUNGE very rapidly in one day and I cannot close out my spread quick enough, to catch it running through my bet.

Haven't learned how to close out yet. That experience will oex eventually I suppose? Which is why we do virtual paper trading first. That's the new lesson for this week so far! Because only one side can get hit, if price action is volatile enough, or you put it in too close to the movement.

I'm told that this usually wipes out both trading of the channel strategies. The goal is to swallow an extra set of commissions and close out BEFORE you get hit, should the price go against you. That way if you had collected enough TIME DECAY already, you might even break even, or perhaps take a little cash home with you.

The losses get bigger if you are hit, multiplied by the number of contracts you hold. Others say, you can do a ROLL OVER which means implementing ANOTHER Vertical Spread, another strike further away. Not faced those decisions or problems YET! Tuesday, April 13, SO YOU FIGURE YOU CAN GET RICH QUICK TRADING OPTIONS OR STOCKS?

SO YOU FIGURE YOU CAN GET RICH QUICK - TRADING OPTIONS, OR STOCKS? Posted by Pete Stolcers on January 6 Option Trading Question My question is simple, but best explained by telling what I want to do.

Buy, hold for 1 - 7 hours, sell and bank the. Here is my thinking: So all I need is to know is which stocks will move today, by at least. It is true that most stocks move everyday!

All I would have to do is to make a half a point on a share stock trade each day to make it all work. If I compound that. If a life-long trader does it once in his career, it is quite an accomplishment. If these returns were easily attainable, one out of every five people you meet would be a stay-at-home trader.

My story made the cover of Active Trader Magazine - September Now, let me address some oex parts of you question. Can a person trade in and out of positions, scalp the market and make profits - yes. Because of the short term nature of the trade, slippage and commissions take a huge bite out of profits. That means that options are out of the question. Live data feeds, charting and advanced order entry features are a must.

This type of trading is a grind and it is a very emotional experience. It can take years just to get profitable. In the question strategies addressed the issue of being able to predict the direction of a oex. Expect to spend months reading about technical analysis and money management.

Then expect to spend at least two years finding an edge and developing an approach. When that ends, so will the careers of many scalpers until the next major trend. I believe the better way to trade is to form an opinion and to spend your time on research and analysis as opposed to reacting to every tick and blip on the screen.

If you think about the richest traders in the world George Soros and Warren Buffet they did not scalp markets. They did extensive macro research and took long term positions.

If you form an opinion and take a directional stance for at least a week, your returns and risk go up dramatically. There are many other people that will sell you a pipe-dream of riches. I have a systematic approach that has taken me years to develop and there are many years when I exceed my expectations.

Day traders and option traders who have been around the block recognize the quality of my research and rely on it for trading ideas. Since I used your question, you can try a OneOption research report free for a month. This is the easiest business to start and the hardest one to grow. Anyone with a wallet trading pull up a chair. Friday, April 9, Report 21, End of April 9th weekly accounting. Photo of Grandpa Ray, OEX Option trader, with oex Silvia on left and daughter Diane on the right.

The VIRTUAL ACCOUNT with the broker is supposed to evolve into a medly of the other three types of trading, depending on results and the learning process, of when to implement them in different market conditions.

OPTION HOUSE- no trading - remains at Balance of: Was only able to leg into one side and unable to complete a CONDOR CHANNEL. I was trying to confirm the CHANNELS for a CONDOR,also the parameters of safety, versus the spread allowable to give a decent return. One guy on the internet was saying; he bought on a Thursday to expire on Friday, using WEEKLIES. I tried that and it didn't work within my safety parameters and the decent return expected.

Strategies fact, it wasn't possible except at closer in - higher risk parameters. My accidental entry based on volatility seemed a good one. Will try it next week, on both option of a CONDOR and see what happens? For past trade details scroll down to Report 12 of trade action. It is a good way to lose money. The effect on your own analysis is usually bad. I think a trader has to stand on his own two feet.

Sort of like the GIVE A MAN A FISH and you feed him for one meal idea. BUT TEACH A MAN TO FISH and you feed him for life. That said; in looking up experiences and references to different option trading strategies I did run across an interesting site the strategies day called LIVE OPTIONS TRADING EVENT, by Peter Stolcer which was pretty good.

It more or less mirrored my own conclusions, so I guess that is why I felt it was okay? For expiration on Friday, settlement Saturday. I'll probably use OPTION HOUSE for everything else, in straight buying, or single VERTICAL SPREADS.

Lost money last week on my quickie trade, so Option don't have much going right now. The volume is so low. Anyway, working on it and studying it.

Mostly I'm interested to see what happens in a rapid BEAR MARKET and if I could get out of the losing side of the BULL Oex CONDOR in reality, without too big a loss, during a rapid plunge. That seems to be the only danger to credit spread trading? The skew for losses is very bad. Trend following and CREDIT SPREADS seem to be the best choices so far tried.

The QUICKIE TRADES do not seem to be working out? My longer very few 6 or 8 trend following trades are pretty much settled and do work. So I'm very pleased with that aspect. Now over the rest of this year, to see if I do okay? The trends tend to follow the monthly bar chart over each two month period. I think the QUICKIE trades with any reliability will only work in a BEAR PLUNGE. So my trading philosphy is crystalizing and getting sorted out.

Going to study DEBIT SPREADS after I get trading with these CREDIT SPREADS. Got me a 4 page work sheet on CREDIT SPREAD TRADING do's and don'ts. Culled from all over the web chat forums. Set myself up some rules to follow. The SECRETS and TRICKS which one can find if one reads enough and tries some things yourself.

About 20 years ago, I read about option books on SPREAD TRADING by an old trader in the Florida International University library. It was really exciting reading, as he went blow by blow on each trade, as he juggled the market conditions. At the time I thought I want to do that. The sources on market data is a lot more today and it becomes easier to understand what he was doing back then. There is a lot more information on how these things work in real life now through the internet.

Back then I found it mystifying and lost some money trying it through a discount broker. Didn't make any sense to me, that modus operandi. Sunday, April 4, THE STEEP LEARNING CURVE FOR SPREAD TRADING - report THE STEEP LEARNING CURVE FOR SPREAD TRADING! Been perusing the web to learn about credit spread experiences. I've been picking brains and actual experiences, to make a list of DO's and DON'TS, for my credit spread and particularly the CHANNEL condors CREDIT SPREADS as it pertains to my OEX INDEX trading.

Should I EVER get good enough at this, to make steady money, would try some other index's. They all run in parallel more or less anyway, I notice. Ships float in harbor with the tide! Hope I've got all my rules in place? The only real big danger seems to be a one day BEAR MARKET sudden plunge? Buying back the SOLD PUTS would be my strategy to reacting to that; preferably BEFORE it hit my SOLD side of the CHANNEL.

Starting this week in early APRIL will be trying my ideas with the CREDIT SPREADS using THINK OR SWIM. Just got into their web site this morning and registered. Bit of a learning curve again, to putting on a spread and stuff to go through. I wanted to trade WEEKLIES on the OEX and don't know eventually if other indexes have weeklies?

Unfortunately, OPTION HOUSE does not have OEX WEEKLIES. We shall see how it goes with THINK or SWIM? Have to laugh, when somebody commented you can learn CREDIT SPREAD trading and IRON CONDORS in a few hours. Took me two weeks to figure it out, and look for the problems and the tricks to dealing with those problems. I notice a lot of SELLERS are advertising for MONEY, special tricks.

Don't go that route myself. Don't need a Option BOX, like to be in charge of my own destiny. That way, nobody to blame but myself. Whoever it was said that, commented; "that was misleading". Which I figured already, being an old fart, with enough experience in charlatans and soft soap oex pitches. Anyway, just a running commentary, mostly for myself. To remind me when I look back at all this, to see if I was right or wrong in my opinions? Something I'm trying to figure out?

Is there actually any capability, or anybody really trading 50 contracts, per side on OEX WEEKLIES in IRON CONDORS? Trading I'm an amateur, untested with real cash, so what do I know? In the meantime, I think one has to periodically take some money off the table as a solution.

Thursday, April 1, report 18 on trading ending March,OEX Experiments. Trend longer trading 6 or 8 per yr hasn't started yet zero neutral For details scroll down to Report 12 of trade action. Newer Posts Older Posts Home. Report 28 Difference between CONDORS and IRON C THE NUANCES OF VERTICAL CREDIT SPREADS report Trade results of spreads, April 12th to 16th, Report 24 SHAKING THE MONEY TREE! Report 23 Figuring Vertical Spread margin. SO YOU FIGURE YOU CAN GET RICH QUICK TRADING OPTIO Report 21, End of April 9th weekly accounting.