4 Golden Rules of options trading in my stock market

Option Trading for the faint hearted, because it entails risk and you need not be risk-tolerant. My 30 + years of experience trading options with you I'm sharing these rules so you can get a feel for my technique. I like to use spreads from the sell-side and reduce my risk of trade finance.

News for the long term will not affect a strong stock.


1. Option time - always working for your option trading strategy to buy time enough. What to buy a riverboat gambler style until your business is not that near-term options. I call that spreads open and spreads like putting 90-230 days left before the end. Options like stocks are affected by economic and political reasons.With options, the clock is ticking and you should close them or they expire worthless.

2. Options Trading Discipline - Always watch your option trades and strategies do not work, go out and move on to another business. Never been in love with a stock or option, and it's going to fall if the state is losing money. Hope it is better if you have 60 days or less, it usually will not get better. Close their positions before the end and the sooner the better - do not hold end option. Do not get them to zero. Try to keep the losses small.

3. Options volume or open interest - always with high volume or high open interest to buy stocks or options so that there is a market and price advantage when you wish to get out of the situation. Thinly traded stocks actively traded as much or as fast as stock prices do not increase.If open interest is weak in the current month, chances are it will be vulnerable in the future months.

4 option price - call spread or put spread option prices are very close to a month could be next.If you use spreads, money, money out of options to purchase and sell options. Put the odds in your favor.











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