Emotions are said to be a trader’s worst enemy. Our Achilles Heel.

They take control of us and cloud our judgment. They force us to make mistakes and decisions that end up hurting us in the end.

That’s why people introduced trading systems, computer programs, and crazy complicated algorithms. – To take the emotions out of trading.

But I am still human, and so are you. So we are still liable to make mistakes based on our emotions.

In one instance I am knowingly letting my emotions get the better of me. They are making me violate one of the cardinal rules of trading.

The rule says that you should not hold a grudge against a stock. You do not need to make your money back from the same stock you have lost money on. It is better to move onto another trade.

I can’t do that. I have documented every stock, etfs, and index I have traded over the past [...]

This is a video of myself looking for some option trades using one of my real money accounts. These trades are for example only and I may exit or change them at any time without telling anyone.

This is a sample of the types of videos that are produced for Option Genius members which anyone can join from our homepage.

Here is a trade I just put on in my personal account.

The stock is NLY. The trade is a simple Put credit spread

Sell to Open Oct 16 Puts (.40)

Buy To Open Oct 15 Puts (.26) for a credit of .14 cents per spread.

Trade has a 74% probability of success. And can make 16.2% if left to expiration.

NLY is a financial company but a very boring stock. I love owning this one as well because it pays a little over 10% dividend right now.

So here is how the trade works: If NLY is above 16 on expiration day (right now it is trading at 17.68) I make the whole 16.2% minus whatever commissions I paid to get into the trade. If NLY is below 16 and above 15 I will be assigned the stock if I don’t exit the trade. Again, I don’t mind owning this stock. if NLy is below [...]

Got a question from a member recently:

I have been looking at stocks, and 1 expert says UNP has the highest value in the s&p 500.  It appears to be doing well.
Please look at the calls with me.

 The jan 2012 leap, at 60. I believe is selling at 33, which puts it at 93 and is trading at 93.5.   If you expect it to go to 100 by then , the gain should be 6.5 $ for a 33 $ investment or about 19.7%  over 10 months??  Am I seeing this correctly?? and the math right ???  It appears that the inthe money option is a better value than the out of the money ??
A 7 % move giving a 20 % gain????????

Looking at the 100 call, jan 12, it sells for about 5.80.  If it closes at slightly over 100, you may get a dollar gain ???????  or actually, break [...]

I often get asked by members which are better to trade, Indexes or ETFs. “Should I trade SPY or SPX, IWM or RUT, QQQQ or MNX?”

The answer is, it depends. But I do have my preferences.

Liquidity

Both ETFs and Indexes are very liquid.  As I write this the At The Money Call in  SPX has an open interest of 45,000 contracts. The SPY At The Money Call has an open interest of 85,000 contracts. So both are very liquid. Major hedge funds though trade the indexes because they trade directly with the market makers.

Advantage: Even

Commissions

Commissions play a role because the SPX is ten times larger than the SPY. So if you want to trade $1,000 credit spread, you can do it with a 1 contract spread in SPX or a 10 contract spread in SPY. If you are paying per contract, the commission to trade SPY is ten times larger. if you [...]

This article is from cnbc.com.  http://www.cnbc.com/id/39418129

Not only does the article tell the story of how the trader did it, but also gives you the trade he is in right NOW.

One thing I want to point out is that this trade had very little risk for this trader. Why? Because it seems that the trader was bullish on the stock and thus would have bought the shares had they gone down. So basically he would have gotten a discount on them as well as have the ability to buy them below what their “value” was.

Fun With Options: Trader Pockets $455K on Walgreen

Published: Wednesday, 29 Sep 2010 | 9:53 AM ET by Jeff Cox

Some (options) guys (or girls) have all the luck.

Nick Ut / AP

Well, at least one of them has had a tremendous amount of good fortune lately by playing long and short positions against each other on drug store chain [...]

A little over a year ago I went to one of those free trading seminars provided by companies that want you to sign up for their coaching or training.

The concept they were teaching was day trading and so it did not interest me very much, but a couple things the speaker said were very interesting. The guy’s name was Tom Busby.

He said that once a stock breaks a hundred $ level for the first time it zooms up 10%.  For example, once a stock breaks through $100 it is going to $110. When it breaks through $200 it is going to $220, etc.

I had heard this before somewhere so I started looking it up. It turns out that Jesse Livermore mentioned this in one of his books. Livermore was probably the best trader of all time.

So now with two reference points I decided this was something worthy of looking into. [...]

Warren Buffett’s Berkshire Hathaway has set the date for a shareholders meeting related to its planned acquisition of Burlington Northern Santa Fe.

In a preliminary proxy statement filed this morning with the SEC, Berkshire gives notice that a special meeting of shareholders will be held at 9:30a on Wednesday, January 20, 2010, at Omaha’s Holland Performing Arts Center.     

Shareholders are being asked to approve a 50-for-1 split of Berkshire’s Class B shares, without splitting the higher-priced Class A shares.

That split would bring Class B shares down from about $3300 each (at today’s price) to roughly $66 each.

In an interview with CNBCjust after the Burlington deal was announced about a month ago, Buffett told us:

“I’m not big on stock splits. But by having this split, it enables anybody that has as little as one share of BNSF to opt for the tax-free exchange… So those small shareholders can have exactly the same availability [...]