One of the great things I’ve experienced while getting All Star Options off the ground with JC has been putting pen to paper to really codify for myself how I view options trading. It’s one thing to have a nebulous sort of idea of how I approach certain options strategies and when and how I might employ them, but it’s quite another to sit down and really break down how each strategy should work, how it fails, my plans for taking profits and/or cutting losses and opportunities for position adjustments.
Instead of hoarding all this brainstorming for myself, we’ve decided to add it to the Education section of Allstarcharts.com so that you, too, can have easy reference points for thinking through your own trades.
The thing about options strategies is — there really isn’t any one way to trade each strategy. There are many common practices, but we all have our own interpretations. Mine aren’t necessarily better or worse than anybody else’s, but I think you’ll benefit from seeing my perspective. We can all benefit from opening our eyes to seeing ways that others interpret or perceive opportunities. If you take one small nugget away from what we share here that serves to earn you some profits or reduce some risks, especially if it’s a repeatable best practice, then this was time well spent.
In the Options Module, I discuss position sizing and why very careful consideration should be given in this area. Leverage is a helluva drug, and it’s easy to get carried away in options. When in doubt, always err on the smaller side. There is also a section on portfolio management and why you should always be mindful of your overall portfolio delta. It’s never great to have all of your positions exposed to the same risks. That’s where hidden trouble often resides.
Then we get into perspectives and things to be aware of with various spreads. For example, I’m always eager to take profits early in vertical spreads, and I prefer to skip bull call vertical spreads all together when I’m bullish, here’s why.
You’ll also be able to read my views on the important Greeks, and my interpretation of various key options terms in our Glossary including “Legging into Spreads,” and why I think it’s most always a bad idea even though I still do it occasionally.
In all, there are currently 8 lessons in the Options module, with more likely to be added in coming weeks and months. And the content is freely available to everyone, not just subscribers to All Star Options.
If you have any feedback or suggestions for additional insight you’d like to see, please hit me up in the contact form.
Here is a link to become a founding member of All Star Options at a discounted price!