[Options] When to Press, When to Manage

Sean McLaughlin
June 12, 2019

There are a number of great services for options traders out there that offer smart ideas for premium selling, or Iron Condor trading, or earnings trades -- I'm friends with many of the best practitioners. They are fantastic at what they do and I'm happy to name names. Just ask.

Subscribers to All Star Options come to us for option trade ideas which take advantage of directional edges the All Star Charts research team uncovers through exhaustive technical analysis. We are not beholden to any particular type of strategy, options spread, or timeframe. We simply examine each opportunity on a case-by-case basis and make an informed decision on what we feel is a good way to play a particular situation. We might not always end up picking the "best" way to leverage into a opportunity, but we think over time and over many iterations, our good decisions compound favorably.

We're just as likely to go long premium as we are to go short premium. Sometimes we just buy long calls, and other times we put on bullish Risk Reversal trades. Or maybe we'll sell a Bear Call Spread or a bearish Put Calendar Spread. We simply choose strategies that we think align best with the current volatility environment, our time frame, and our expected move -- often with significant margin for error or defined risk.

There are also times like we find ourselves in right now where broader markets (S&P 500, Russel 2000, Dow) aren't doing a great job of signaling to us their next move. The path of least resistance isn't abundantly clear. Meanwhile, we have a bunch of open positions in our All Star Options portfolio that have had big runs and are starting to show possible signs of exhaustion. And as we're heading into the end of June where trading often tends to slow as traders eagerly start their summers, it is times like these where forcing new trades is likely to yield less value than managing our current positions.

For every trade we publish, we lay out our plan for how we will manage our position under a variety of situations over the lifetime of the trade. This is an essential part of the process. Very few of our trades are "set-and-forget." There will be adjustments that might need to be made, profits that should be taken, stop levels that should be adhered to, etc. If nothing else, reading through our trade plans should offer the reader lessons and positive reinforcement of Best Practices that will make you a better trader in whatever trades you do on your own. Best Practices need to be practiced, repeated, and become part of a work flow that is second nature to your daily routine.

Now is a great time to review trade plans for open positions. Make sure we're taking action where we need to take action.

In the meantime, we'll patiently wait for good reward-to-risk opportunities to present themselves.

~ @chicagosean

If you'd like to learn from our process and benefit from a stream of option trade ideas, I personally invite you to try out All Star Options Risk Free.

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