[Options] Small Ball

Sean McLaughlin
December 31, 2020

Me, JC, Steve, and the rest of the All Star Charts team were casually chatting during our weekly strategy session and Steve asked me: "What was our biggest options winner this year?"

Without a doubt, our best options trade in 2020 was long Peloton $PTON. We entered long October 60 calls in $PTON on June 17 when it was trading below $52 per share. The stock then went on a rocketship ride and touched an all time high north of $139 per share on expiration day Oct 16th, which we rode all the way. It rarely happens that we hold a long calls position all the way into expiration day, but the last 3 weeks saw barely a downtick, so there was never any reason to hit the escape hatch.

As we further discussed this, it hit me and I remarked to the guys that "What's your biggest winner?" is a bit of an unfair question. I don't think 2020 was a good year because of a handful of big winners. They certainly helped, but the real reason why 2020 was so successful was because PROCESS was our big winner.

Many (maybe most?) of the trades we put on are spreads which have both defined risk and capped upside. By design, we're not trying to hit home runs with these trades. Instead, we're just looking to play small ball, move the runners around the bases, and put points on the scoreboard. Pile up enough hits and it's a winning recipe.

Yes, homeruns put asses in the seats, but scoring runs consistently wins games and championships. Or in our case, leads to longevity in options trading.

What makes what we do so special is that we're not just taking advantage of favorable risk/reward scenarios of various options strategies, we're leveraging best in class technical analysis to identify directional opportunities where many options traders don't dare to look!

This is what makes what we do so fun.

My wish for all of you reading this is that you find what's fun (and profitable) for you in 2021 and find a way to do MOAR of it!

Happy New Year!!

~ @chicagosean 

 

 

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