3 Way to Create Income Using Options?? | Trading a Smaller Account
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- Опубликовано: 10 сен 2024
- Trading a Smaller Account | Barbara Armstrong | 7-12-24
Characteristics and Risks of Standardized Options. bit.ly/2v9tH6D
In this webcast, we discussed 3 different trading strategies that might be considered to generate income in an account using option strategies. We placed 4 examples trades on the thinkorswim paperMoney platform. All trades had target exits.
Do you have a smaller account ($5,000? $10,000? $25,000?) or are you interested in trading a smaller portion of your larger account? Explore ways to trade, manage, define risk and learn about options strategies in this Active Trader class.
1023-3KVR
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled "Characteristics and Risks of Standardized Options" before considering any option transaction.
Follow Barbara Armstrong on X, @BarbArmstrongCS
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Barbara clapping back at the negative comments… I love it! 💪🏾
Hmmm. We have such a positive group by and large, I'm not sure which negative comments you're referring to but I'm so glad you loved my response. ^Barb
Thanks Barabar...appreciate your work and knowledge
You're welcome. Thanks for joining us. ^Barb
Thank You Barbara! Have a great weekend.
Hope you had a great weekend. Thank you for being such an active part of this community. ^Barb
Thanks Barbra, have a nice weekend.
You're welcome. Hope you had a great weekend. ^Barb
on the 12th of July you had a trade with orcl, you bought 2, however you sold only 1 does that need to change?
Yes. That was 'trader error' aka a mistake on my part. I discussed that in the Trading a Smaller Account class July 15. The stock gapped up and both ORCL long call trades hit the example target triggering the exit for a nice profit when the market opened. By the time we got to class, the stock had pulled back & the profit on the second contract was much smaller. Oops. Always pays to double check your trade entries! ^Barb
for ORCL the long call didn't hit the prev high and now the call is falling and Time is eating it up. Not sure the call will be profitable. That is problem with swing trading using options. I think I would prefer OCO order and get out when option reached +50% or -50%. I understand it was for teaching and you taught it so clearly. Maybe do swing trade next time on the Stock? Your thoughts
Good points. We placed the example long option swing trades on ORCL on Friday July 12. It hit the target on Monday July 15th at the market open and both positions were closed for a nice profit. We did review this in the Trading a Smaller Account class on Monday July 15. We also placed a new swing trade on a different stock, this time using stock instead of options. You might want to check it out once the session is posted in the archives. Thanks. ^Barb
why aapl if earnings before the expiration date? wouldn't you wait per your rules?
With a 1ATR target, the expectation is that the trader would be in the trade likely 1-7 days on average. In fact, with this example long call trade that was placed on Friday, July 12, the stock came up to within .01 (one penny) of the target, so in our Monday July 15th webcast, we chose to exit the trade for a profit. Once the Monday webcast is archived, you might want to check it out. Here is the link to the series for Trading a Smaller Account: ruclips.net/p/PL8a6s5nq1lPTl4QH-h71y1Z5KEePqtVgy&si=WfU-ihw8QZbeh3Oj ^Barb
Why do we care bout the position size? Our risk is our risk. Position size can be $5K or $10K, and I will still be risking $500. Position size can change, risk does not.
In the Trading a Smaller Account, we chose to have 2 guidelines regarding risk. One is max risk/trade. The second is position size. This is to prevent the account from having 'too many eggs in one basket'. Each individual trader might create a set of guidelines they are comfortable with. ^Barb
@@tradertalkswebcasts Thank you. I enjoy the videos.
The royal we talk about position size in 2 dimensions. 1 regarding risk vs size of the account value. (The position size - MAE ) be properly allocated so that if a drawdown occurs the account losses no more than .3% ie the position is equivalent to no more than 2% of total account value (equities + cash/treasury) 2. Position size should value add when the set up is more favorable based upon expectations and set according to that conviction. Great call on Crwd!
1atr stop?
The 1ATR Stop is initially 1 ATR below the low of the entry day based on the example trading plan. It could also be 1 ATR below the current price of the stock. That is up to the individual trader. ^Barb
I don’t see any difference between Barbara and the bar tenders on casino table keep bringing you fresh drink till you lose all😮
Schwab has several coaches. You might find another coach whose trading style you are more comfortable with. This Trading a Smaller Account class has now been live for several years and, thus far, the conservative, rule based, active trading strategies we have used with consistency have served us well. Having said that, there is no guarantee as to what the future might bring.
My goal has always been to help traders learn to trade with discipline, consistency, and ultimately with success.
I wish you all the best.
^Barb :)