Online Option Trading Strategies

Here is Lesson 1 of my Mini Iron Condor Trading Lessons

Iron Condors

$1,000 credit spread

The following article is from the December 2010 issue of Forbes magazine.

I don’t necessarily endorse the trading method listed in the article for all traders. But I do use these techniques myself to supplement my stock trading. Only experienced option sellers should try these techniques.

Get Naked For Income by Matt Schifin

Safety and income. It’s what investors crave these days. Everyone is nervous about the stock market and Bernanke’s bond bubble. Safe sources of income like bank CDs and Treasury bonds pay next to nothing. Muni yields are a joke, plus many are fraught with risk.

But there is another relatively safe way to generate income that most investors rarely consider. Stock options.

Options need not be speculative. They can be a smart way to generate income and manage portfolio risk. Discount brokers offer a host of free online tools to educate you about options and keep you from trading your way into the [...]

Oh oh, GLD jumped up today along with the rest of the market. You’d think that if the stock market goes up because the economy is getting better than Gold would go down. Nope. So I guess the economy is not the reason the market is up today – contrary to what the news tells us.

As long as the dollar gets weaker, the markets and GLD will both go up.

But there was an interesting post on another blog Slope of Hope that showed graphically that Gold might be heading towards a retracement. Check it out if you are a Gold Bug.

OK, back to business. The up move today took GLD outside of our upside Calendar break even.

Here’s what it looks like right now.

So what do we do? I don’t want to add more capital to this, even though that is an option.

Step 1. Take off the spread hurting us the most. [...]

Yesterday I added a GLD trade to the OptionGenius.com portfolio and I mentioned that GLD might be a good candidate for a Calendar Spread. Several members emailed me asking to explain how to set up the trade and the parameters so I decided to just post it on the blog. I tried making a video but I am a total non techie and screwed up the video. I got it uploaded to Youtube but everything on the screen is so small you cannot see what I am doing.

Anyway, here are some screenshots of the trade.

GLD Calendar Spread

Breakevens

The trade was to Sell the Oct 125 Calls and Buy the Nov 125 Calls. That sets up a simple calendar. You can use puts or calls, they are interchangeable but the puts are usually cheaper. The plan is to adjust when GLD hits a breakeven. The simplest adjustment is to just [...]

If this is your first visit or you just didn’t notice I wanted to point out that the blog has changed.

It has gone under a complete redesign to better communicate with readers and members as well as keep me better connected to you via, facebook, twitter, rss, youtube, etc.

And I also incorporated the Option Genius logo – the cartoon Einstein looking character. I think this brings out the playful side of the site. You can’t be serious all the time, right? After all, it’s just money.

If you are already on Facebook, you can click on the Like button to become a fan of the OptionGenius Facebook page. I haven’t launched it officially yet. Still getting some programming tricks for it. But the more friends and fans the better.

You can also click on the orange rss button to follow this blog and get notified whenever there is a new post.

All [...]

This post has no educational value. I am just venting my frustration.

Got an email today from a member that was having a problem getting our emails. So when I investigated, it turns out that he has taken advantage of the $1 30 day trial FOUR TIMES. What a wonderful fellow (sarcasm). He went through the effort of using different email addresses and different names to create new accounts every time his 30 days was up so he would not have to pay the monthly fee.

And this is supposed to be someone who can afford to be investing? If you have thousands of dollars in the market, why would you go through all this trouble to screw me out of a few dollars a month?

You are stealing you loser. Why would you stoop so low to save a couple dollars a day?

And it’s not like he did not get any value of [...]