Open Question Time!
Hey Option Traders! So I’ve been thinking…
I hate to just post stuff arbitrarily and hope it’s something you want to read about. I’d rather be writing about the things you want to learn. With that in mind, I’m going to have an open question time. Here’s how it works…
Simply scroll down to the bottom of this post. You will see a box with the words "Leave a Comment" directly above it.
Click your mouse inside that box. Then type out your question.
The question you ask must be about option trading or covered call writing. Also, your question must be straightforward. One sentence that ends in a question mark would be ideal. In other words, I want your question to be succinct, and without all the reasons why you’re asking the question.
Please realize I cannot give personal advice regarding a specific situation or trade you may be facing. I can only provide education. I will provide that education based on the specific questions you ask.
Does all this make sense to you? If so, please scroll down right now and enter your question in the comment box. Click the "Submit Comment" button to send your question to me. I currently have "Comment Moderation" turned on, which means you won’t see your comment appear immediately. I’ll have to approve it before it shows up on this blog.
I guess that about does it. I look forward to hearing what questions you have!
Best regards always,
A.J. Brown
P.S. Depending on the number of questions I receive, I may post my answers all at once, or I may turn the questions and answers into individual posts. Since this is the first time I’ve done this, I’ll just have to wait and see. Thanks again for participating.
P.P.S. Have you checked out my other most recent posts on this blog? If not, you should now. Click here to check out what I’ve been talking about.
A.J. Brown @ 3:27 pm:
Hi Sergio,
I approach covered call writing differently.
Depending on the underlying stock, I will choose a strategy of either getting called out for a one-time deal. Or, not getting called out and instead just collecting premiums all along.
I therefore don’t measure delta when selecting the appropriate option to sell.
A.J. Brown @ 3:32 pm:
Hi Doc,
The apprentice program is focused on making your trading practice very efficient and as automated as possible.
I’m not sure where you got the impression that the apprentice program was for traders who want to trade full time.
The opposite is true.
In fact, if you’ve been around me for any amount of time, you would know I get an allergic reaction when someone says they want to trade full time.
For me, being a full time trader is not the dream lifestyle. Being a trader is the means to the end of a dream lifestyle.
Most of my past and present apprentices are professionals with full time careers (until their trading profits are larger than their career profits - even then, they don’t go to trading full time.)
Hope the record has been set straight.
A.J. Brown @ 3:35 pm:
Hi Barry,
The short answer to your question is yes.
Quick and easy comes with knowledge, experience and skill.
If you have no knowledge, experience or skill with trading, then no, it won’t be quick nor easy. And, it will be painful both in time and money wasted.
If it were quick and easy for those without knowledge, experience and skill, wouldn’t everyone be doing it?
I caution everyone… THERE IS NO HOLY GRAIL to trading. There is no blue pill you can take (a reference to the movie the Matrix).
Francis OBrien @ 3:38 pm:
I need to learn paper trading so I can practise Where do you suggestb I go and what do I read
Kenneth J Polke DDS @ 4:47 pm:
Hi A.J. Thanks for the speedy reply and thanks for setting the record straight. This is exactly what I’m looking for. Sorry to bother you but I’m relatively new to the “team”.
R/
“Doc”
A.J. Brown @ 5:15 pm:
Hi Doc,
No worries. I’m sure a ton of others got clarification as well.
I find that when I have an impression of something, I’m usually not alone. So, if you had that impression of the Apprentice program, there’s a good probability that others did as well.
Phew. Glad we go that settled.
A.J. Brown @ 5:27 pm:
Hi Francis,
I think you’re asking how to paper trade. Go to your local office supply store and get a notebook. At the top of page one, give yourself some money. How about $5K, or $20K. Make it as close to the real amount you’ll be starting with when you’re ready.
Then, start trading that “virtual” money.
Record the Option, your buy price and the number of contracts you bought. When you sell, record your sell price and the number of contracts you sold. Calculate your win or loss and calculate your ROI. Record your comments for each trade.
That’s it, that’s all.
If you want to get more in depth, record commissions.
And, before graduating to real money, transition to a simulator instead - still virtual money but with a live online interface that is real time. Simulators are the closest to real trading without using money. The CBOE has a nice free simulator powered by options express.
For more on paper trading, check out one of my previous blog posts on the subject.
http://www.tradingtrainerblog.com/option-trading-with-zero-risk/
A.J. Brown @ 5:32 pm:
Hey Dennis,
Sorry I missed your comment.
What you describe works well so long as you can keep it all straight in your head.
As you play around in reaction to an underlying stocks change, the chance of a clerical error increases drastically.
Again, it comes down to knowledge, skill, and experience. If you have those, you’re good to go.
We love it when a good plan comes together.
jim byrnes @ 5:46 pm:
could you explain the best way to close out adebit or credit spread at or near expiration??
Cal @ 6:59 pm:
Like you have a method of creating a call option buy, watch list using the IBD. Do you have a similar method for creating a put option buy list?