BLOG

The Floater Trade

The Floater Trade

Jim Riggio put an SPX trade on about two months ago when the SPX was at 2000. Jim put a 90-day (DEC expiration) 1975/2000/2025 butterfly on. Nothing fancy or unbalanced. I put the same trade on the next day.

Jim and I took two different approaches to managing the trade

Jim was a “set and forget” while I started making the trade a broken wing butterfly as the market started moving down. My trade made a $1256 profit in just short of two months on about $7500 of margin used in the trade. That's a return of +16.75% in two months.

But what does this have to do with that duck?

The way I managed the trade was to lift the downside and lower the upside. I was “floating” the expiration profit/loss up and down, as the market moved. Just as a duck floats on the water and goes up and down with the tide, I was floating my expiration profit/loss lines up and down.
read more
Loving the M3

Loving the M3

I remember back in the day when I was learning “income trading”. I used to trade the “not so” mighty iron condor strategies. Yes, the very same strategies that have regained popularity in the low volatility markets over the last 2 years. I can still recall how everyone loved these strategies back then and how I jumped on board just in time to experience the change in market conditions that took all those traders out. What a mess!

It was at that point I said “never again”! Never again will I blindly follow some trading system that someone else tells me is great. Never again will I be in a system I don’t understand. Never again will I trade a strategy that isn’t adaptable to market conditions.

My massive failure sent me on a quest to develop a way to trade profitably in any market condition. And after thousands of trades and hundreds of hours I finally did it…

read more
Options Trading for Income with John Locke for October 27, 2014

Options Trading for Income with John Locke for October 27, 2014

A great way to improve your trading results is by keeping up to date with the latest trading techniques and current market conditions!

Click HERE and join me every Monday at 9 AM EST for our free “Options Trading for Income” Webinars! Where you get expert analysis of the markets and the opportunity to follow along with the best options trading strategies in the business.

read more
The Round Table with Dr. Duke on Thursday Oct 30th

The Round Table with Dr. Duke on Thursday Oct 30th

Author Kerry Given, also known as “Dr. Duke”, from Parkwood Capital LLC, presents “Option Trading Myths” on Thursday October 30th at 6:00pm ET. Dr. Duke will show you if it's better to buy or sell options, if it's an advantage to be a market maker and the relationship between probabilities and option pricing.

Click here to register for this free event

We will record this event and post it in our free members area.
Get your free login here if you don't have one already.

read more

Options Trading for Income with John Locke for October 20, 2014

This article originally appeared at www.lockeinyoursuccess.com.

A great way to improve your trading results is by keeping up to date with the latest trading techniques and current market conditions!

Click HERE and join me every Monday at 9 AM EST for our free “Options Trading for Income” Webinars! Where you get expert analysis of the markets and the opportunity to follow along with the best options trading strategies in the business.

read more

Do You Know Your Greeks?

Anyone who’s looked at my trading style can clearly see I’m always short volatility. This often brings up the question, “Aren’t you scared that a rise in volatility is going to cause a loss?”

Scared? Not at all, but I am concerned. It’s true, at any moment something could happen that causes a huge volatility increase and yes I may indeed take a loss on a trade. I don’t like losses but if that happens, so what? Losses are part of trading and I’m aware of that risk when I go in. Therefore losses are included in my cash flow projections and do not present a problem.

What scares me is the traders who assume they are immune to volatility just because they’re in a calendar or diagonal.

read more