Call Option Trading Secrets

I make a living out of trading options…and a pretty good one at that!
For a long time I couldn’t say those words as I struggled just to hold on to my capital, let alone make it grow.
Though there were several reasons why I struggled (including being grossly undercapitalized and at the same [...]

Time-based charts (namely Candlesticks, OHLC Bars and Heikin-Ashi) fail to truly depict price.  This article will help you realize that time-based pattern recognition is an unreliable method for stock option trading.Some retail training firms like to popularize the myth that, “Everyone looks at these patterns in the charts”.  They are partly right.  Though, their use [...]

Clinging on to Fundamental Analysis and stock picking software, only keeps you stuck in trading equities. Trading this way, compounds concentration risk in one asset class and fails to adequately diversify risks across Equities, Bonds, Currencies and Commodities.  There’s much more to stock option trading, than stock itself.I cite Benjamin F. King’s study, quoted repeatedly [...]

Managing the performance of your trading account must go beyond the discipline of money management. While money management remains critical, it is a subset of the total picture of managing your trading account’s profit and loss.That total picture is what Kenneth L. Grant aptly paints in his book, Trading Risk.  Total performance management of trading [...]

The Reward of Profit and the Risk of Losses for retail option trading needs to be managed at 2 related levels of performance: Portfolio and Trade Specific.At the Portfolio level for online options trading, there are 3 types of Targets that must be set, even before you trade.Maximum Return Target: complete achievement of the “ideal” [...]

Not all volatilities are constructed equal.  It is critical to differentiate between Historical Volatility and Implied Volatility, so retail traders learn how to trade options focused on what is material to theoretically price option spreads forward.Historical Volatility (HV) measures past price movements of the underlying asset recording the asset’s actual or realized volatility.  The more [...]

For option sellers it is disconcerting to hear people say that selling naked options is extremely risky because it carries the threat of ‘unlimited loses’. Nothing is farther from the truth! It’s a myth! It’s about time we correct this misconception and put this fear to rest.
While theoretically the selling of naked options carries [...]

Just as elite athletes go through a specific warm-up routine for their body and their mind before competing at a meet, we too as option traders need to follow a specific routine/process before we enter a trade and compete in the markets.
Here is the step-by-step routine that I follow each market day when looking [...]

There are four different types of players in the stock option trading game. They are buyers of calls, sellers of calls, buyers of puts, and seller of puts. The buyers are called holders, and the sellers are called writers. Buyers of calls are said to have a long position, while buyers of puts are said [...]

There are two types of options available: call options and put options.
Call options give the taker the right but not the obligation to buy the shares at a specific price on or before a specific date.
The put options give the taker the right but not the obligation to sell the shares at a specific price [...]