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All Star Options

[Options Premium] Engineering a Rebound

March 3, 2025

Today's trade is in a stock that recently announced earnings. The reaction was muted, which I think is a good thing. It left the chart sitting right where I'd like it to be, holding the recent lows of a 4-week pullback. 

The beauty is that this gives me a nearby risk management level, so I'll have an opportunity to keep losses to a minimum if the rebound doesn't materialize.

All Star Options

[Options Premium] Take Two

February 21, 2025

Even though this stock blasted off following earnings last week, it might just be getting started. The second "take" is what I'm here for.

However, with the immediate catalyst in the rear-view mirror, I will proceed going forward under the assumption that there may be some well-deserved consolidation in store while the stock works its way higher over the next 6 months.

So I'm going to attempt to get paid to ride out any potential wait.

All Star Options

[Options Premium] An Earnings Boost Can Bust This Box Higher

February 19, 2025

Today's trade is in a name that JC liked on his recent Mid-Month conference call.

The stock is hanging around the upper end of a "box" it's been in, just below all-time highs. And with earnings coming up in a couple of weeks, it feels to me like it's just waiting for that "all clear" catalyst to allow it to break higher.

I'm going to get positioned now.

All Star Options

[Options Premium] Most Traders Will Hate This Trade

February 18, 2025

...and that's precisely why I love it.

While me and the All Star Charts gang have been pounding the table on China for several weeks now, it is still a mostly hated and certainly misunderstood trend. But that's mostly because people are reading the political headlines and ignoring the only thing that doesn't lie to us -- price.

So I'm putting on a trade that might take some heat, and I'm in it to win it.

All Star Options

[Options] Options Expiration: What Happens to Your Trade?

February 17, 2025

If you trade options, you know that expiration day can be a wild ride. Some trades go exactly as planned, while others take an unexpected turn—like waking up to an assignment you weren’t expecting.

This week, regular February Monthly options expire. I'm often asked about what happens to my positions or portfolio if I'm holding something that is expiring.

So, what actually happens when your options expire? Whether you’re holding long calls, short puts, or an iron condor, understanding assignment, settlement, and pin risk can save you from some unpleasant surprises. Let’s break it down.

 

What Happens When an Option Expires

When options hit expiration, a few things can happen:

• If they’re out of the money (OTM) → They expire worthless. No harm, no foul.

• If they’re in the money (ITM) → They’re usually exercised or assigned.

• If they’re right at the strike price → Things can get interesting (we’ll talk about pin risk in a bit).

Most brokers will automatically exercise an option if it’s at least $0.01 in the money...

All Star Options

We "APP-Loved" It

February 14, 2025

One for the good guys.

All it took was one "earnings trade" in $APP to get the vertical spreads scoreboard in the green YTD for 2025:

 

We never know which trade will be the one that delivers big gains. That's why it is so important to have a process for sizing our positions, allocating risk equally among ideas, and sticking to it. When we do this, the handful of big winners make up for all the small losers.

Here's a look at the six vertical spreads we've closed in All Star Options so far this year:

 

Prior to yesterday's exit, we were 0-for-5 on closed long vertical spreads. But now with one +320% win, the average return for every vertical spread we've exited in 2025 is $186 per $1000 invested, with an average hold time of 57 days. Not bad considering the 17% win rate!

At the risk of jinxing it, we've got another long vertical spread in $NET that is currently deep in the money and will likely add to the win total and increase our average gain per trade.

It isn't easy losing more times than we win. But sticking to the process and...

All Star Options

[Options Premium] Consulting With the Consultants

February 12, 2025

I've consulted with the consultants, who agree that we should buy 52-week highs that would put us in spitting distance of all-time highs.

And so I shall do just that.

Today's name has somewhat elevated implied volatility, and it's a high-priced stock, so I'll be playing it with a call spread to keep my exposure in check and leverage the out-of-the-money call premiums in my favor.

All Star Options

[Options Premium] Our Top Pick in AI Consulting

February 10, 2025

Today's trade is in a computing company we all know. Some might think their best days are behind them, but the price action as of late would indicate otherwise.

And with what feels like a gift of a pullback to get positioned into, we're going for it!