Tag: options trader

The Most Important Concept in Options Trading


Proper Position-Size in Options Trading It doesn’t matter if you are just starting or have an advanced grasp of all things options, if you don’t think of yourself as a risk manager first, you will fail, it’s just a matter of time. Proper risk management is what separates those that succeed from those that continually… Read more »

Trade Idea: How I’m Approaching Microsoft Earnings


I’ve been enjoying discussing various earnings trades this earnings season. Next week I plan on delving into risk-defined strategies like iron condors with a few examples. However, this week I’m going to stock with another short strangle, this time in Microsoft (MSFT). The company is due to announce earnings next Tuesday, October 26 after the… Read more »

Trade Idea: How I’m Approaching Intel Earnings

Short Strangle Earnings Trade As I’ve said numerous times in the past, statistically speaking, when it comes to options strategies it doesn’t get much better than a short strangle. A short strangle is a neutral, range-bound options strategy (short call and short put) that has undefined risk and limited profit potential. Typically, a short strangle… Read more »

The Probability of Price Targets—and How They Can Lead to Better Investment Decisions


As an options trader, I’ve never understood why professional “talking heads” rarely, if ever, mention the topic of probabilities. Wouldn’t you prefer to know the probability of a stock hitting a certain price? It certainly seems logical. Yet, I rarely hear investors, professional or otherwise, talk about statistics of any kind. It’s unfortunate. We always… Read more »