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Stocks & Commodities V. 27:9 (29): Explore Your Options by Tom Gentile
Stocks & Commodities V. 27:9 (29): Explore Your Options by Tom Gentile
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$2.95 USD
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$2.95 USD
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Explore Your Options by Tom Gentile
TRADING PLAN
I bought five Xyz October 160170 call spreads for $1.79. Heres my trading plan: Buy Xyz October 160170 calls spread for $1.79 Max loss: $1.79 Max risk: $1.79 Max reward: $8.29 Ratio: 4.6 to 1 Stop-loss: If Xyz stock closes below $131 Profit stop: Exit three contracts @ tech stop $155 ($3.46 net credit exit) and let the other two contracts run. Time stop: 30 days to expiration Xyz as of todays close: $152 Current value of spread: $3.00
What else should I build into my trading plans? This is when it gets difficult for me: When Im winning I want to do too much (make a trade adjustment, watch the market live) because Im excited. When Im losing, I dont even want to open my trading account and look at the balance.
First, let me say youre doing the right thing by developing a detailed trading plan for your trade and at the same time examining the what-if scenarios. Next, lets break your questions down into two parts: 1) the actual trade and 2) the psychology of trading options and spreads.
TRADING PLAN
I bought five Xyz October 160170 call spreads for $1.79. Heres my trading plan: Buy Xyz October 160170 calls spread for $1.79 Max loss: $1.79 Max risk: $1.79 Max reward: $8.29 Ratio: 4.6 to 1 Stop-loss: If Xyz stock closes below $131 Profit stop: Exit three contracts @ tech stop $155 ($3.46 net credit exit) and let the other two contracts run. Time stop: 30 days to expiration Xyz as of todays close: $152 Current value of spread: $3.00
What else should I build into my trading plans? This is when it gets difficult for me: When Im winning I want to do too much (make a trade adjustment, watch the market live) because Im excited. When Im losing, I dont even want to open my trading account and look at the balance.
First, let me say youre doing the right thing by developing a detailed trading plan for your trade and at the same time examining the what-if scenarios. Next, lets break your questions down into two parts: 1) the actual trade and 2) the psychology of trading options and spreads.
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