Anyone following any of these trades who want to use some of this information for own use:
You are welcome. But please note that these are not trading advice. If you do make use of any of this information in your own trading, you do so entirely at your own risk. These are simply examples of how we use OptionsExplorer to identify trading strategies on certain target markets and how we implement those strategies, and the results we got from implementing those trading strategies. It is a track-record of trades, updated live as the market changes; examples of trades using OptionsExplorer.
Anyone wanting to follow any of these strategies or try to implement some ideas, if you like what you see, need to understand:
- I've got an advanced piece of software that allows me to make last minute modifications to trade ideas before implementing them. Sometimes the advice from this software is to STAY OUT. (I have on many occasions identified a trade, just to, the next day when I try to implement the trade, find that options prices are not what they were the previous day!! When I analysed the position an option might have traded at $350. Today that same option trades at $170, less than half; I will use the OptionsExplorer to try and find why, and to re-analyse, many times the answer might be that the risk is now too high, rather abort the strategy. Sometimes I may need to adjust the strike prices of my options, thus the final position you see me trading at might be different from the initial strike prices in the trading plan, due to last minute changes necessitated when the market opened)
- You need at least a basic understanding of how options work!! You cannot trade in an instrument that you have zero understanding of the instrument you are employing! (For example: I cannot tell you this is the price of the option and you should buy it at this price of the underlying. You cannot set a break order or a stop order on an option- the market will kill you. The price of an option is determined by a willing buyer and willing seller, who negotiates a price during the day. After hours, if you have stop orders or stuff in the markets, guys can and will do crazy things! People have options pricing models to allow them to determine a "fair value" for the option - such as the Black-Scholes Options Pricing model, but that is by no means the only model. The model only gives you an indication of "what is a fair value", it is not to say the option will actually trade at that fair value.)
- You need an understanding of what drives option prices. People's emotions plays a very large part. Time plays a part. The price of the underlying plays a part. (For example our Corn trade: Our trading strategy called for us to go short two call options and long futures. Basic understanding would have told you that Shorting an option, selling it, the more money you can get for the option when you sell it, the better it is for you. Since these are Call Options, their value Increases as the price of the underlying increases! Thus it is much better to first wait and see what the price of Corn is doing. If indeed it does break out through the #2 point as contemplated, then waiting to sell those calls until Corn trades at a higher price is definitely to your advantage!! It is better to be patient, wait for the right moment and only then sell the Call options. Likewise the futures is to your advantage the lower you buy it - "buy low sell high"! In other words a basic understanding of what you are doing would have helped you to leg into the trade in such a way as to derive maximum advantage from the trade!)
The above are general things you need to know, and you need to understand, to allow you to build a successful trading business - you cannot just blindly follow a trading idea without any knowledge of what you are doing! These are not trading advisories, these are trading ideas. These are not rules, which you have to follow, they are guidelines, they form a trading plan. Any additional information or skills that you have to use to your advantage must be used to setup a trade for (1) which
you feel comfortable with, (2) that fits
your risk profile and (3) that has the maximum chance to work out successfully
for you.
No one else can do this for you - it is your account, you enter certain positions at your own risk. You need to understand the position you enter, enter it in such a way that maximise your chances and you need to manage that position to the end. Ultimately you are accountable for what happens to your account, no one else will take that responsibility.
And therefore the trades posted here does not constitute advice on what you should or should not do. They are examples of what we are doing, with examples of how we implement the ideas and how we manage the trades that we have entered. You are welcome to make use of the information supplied for your own benefit, if you so inclined, but you do so entirely at your own risk
