Finance Newsletters: The Options Blog Newsletter

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A Market Taker Mentoring Free Options Newsletter

This Week in the Market

Short Week. Lots to do.

Aug 21: FOMC Minutes

Aug 21: Existing Home Sales

Aug 22: Jobless Claims

Aug 23: New Home Sales

Read the Options Blog online

Determining Option Strategies on AAPL

Compared to trading equities, there are so many more option strategies available to an option trader. But more importantly: Do you know why there are so many different types of options strategies? This is the real root of our discussion and why getting a proper options education can help a trader better understand all of those strategies and when and how to use them.

Different options strategies exist because each one serves a unique purpose for a unique market condition. For example, take bullish AAPL traders. Now that the stock has recently broken through several resistance areas, there are traders who continue to be extremely bullish on AAPL and want to get more bang for their buck and buy short-term out-of-the-money calls. This might not be the most prudent way to capture profits but that is a discussion for another time. Less bullish traders might buy at- or in-the-money calls. Traders bullish just to a point may buy a limited risk/limited reward bull call spread. If implied volatility is high (which it currently is not but it has been rising) and the trader is bullish just to a point, the trader might sell a bull put spread (credit spread), and so on.

The differences in options strategies, no matter how apparently minor, help traders exploit something slightly different each time. Traders should consider all the nuances that affect the profitability (or potential loss) of an option position and, in turn, structure a position that addresses each difference. Traders need to consider the following criteria:

Directional bias
Degree of bullishness or bearishness
Conviction
Time horizon
Risk/reward
Implied volatility
Bid-ask spreads
Commissions
And more

Carefully defining your outlook and intentions and selecting the best options strategies makes all the difference in a trader's long-term success. Leaving money on the table with winners, or taking losses bigger than necessary can be unfortunate byproducts of selecting inappropriate options strategies. With summer ending soon and supposedly the slow markets, now is a great time to spend optimizing your options strategies over the next few weeks to build the habit heading into the fall season!

John Kmiecik

Editor, The Options Blog Newsletter

Market Taker Mentoring

In This Issue

This Week's Blog

As many of you know, every month we present a 4-part class on a subject important to your option trading. The next one is on of the most important of all:

Option Trade Adjustments

This is by far our most popular 4-part series EVER! We get the most requests for this class, and now you can see for yourself why.

1. To Adjust or Not to Adjust - Thursday,

August 8

2.Outright and Spread Adjustments - Thursday, August 15

3. Adjusting Credit Spreads, Iron Condors and Butterflies - Thursday, August 22

4.Advanced Options Adjustments - Thursday, August 29

Classes are recorded.

But there's more.

MUCH more!

In addition to these 4 live classes, you get access to the recordings of the past 6 months of 4-part series.That's another 24 classes F.R.E.E!!!

You'll see a series on Vertical Spreads, Time Spreads, Protecting Your Portfolio, Trade Execution Techniques and More!