Sean McLaughlin, Author at All Star Charts Page

[Options] A “Loco” Options Trade

January 15, 2019 by Sean McLaughlin

While I’m still not convinced we’ve seen “the” low in the recent correction/bear market, the recent daily price action of the indices sure is doing its best to chisel away at my resolve. And it at least has me considering adding some long exposure to my portfolio, if for no other reason than a hedge.

Earlier this week, All Star Charts published a free post titled A “Loco” Trade Idea. I liked the idea so much I’m gonna copy the guys and layer in a simple options play to take advantage of the outlook. [Read more…]

[Options Premium] This Bellwether Hasn’t Rung the Bell Yet.

January 13, 2019 by Sean McLaughlin

In addition to broader indices, there are certain bellwether stocks we monitor continually to offer better clues as to the strength or weakness of the market. One such stock we monitor has not followed along with the prevailing winds in the market since the beginning of the year and according to our view, is at serious risk if the market were to pause and/or resume back to the downside.

From where I sit, the likelihood of a pause in this bounce is pretty high right now, and becomes even more so with each new closing high for 2019. So with the potential for a significant pullback rising, now feels like a great time to take a shot on a short position in this struggling bellwether. [Read more…]

[Options Premium] Discretionary Income Trade

January 11, 2019 by Sean McLaughlin

The bounce in US stocks continues off the Christmas Eve low, but it is showing signs of short-term exhaustion. Does this mean we go right back to lows? Not necessarily. I’m in the camp that some sideways chop would be constructive for the markets overall. As such, I’m in the mode of looking for smart delta neutral trading plans. [Read more…]

[Options Premium] Which Way From Here? How About Sideways?

January 9, 2019 by Sean McLaughlin

The debate seems to be raging between Bulls and Bears as to what’s happening right now. The Bulls are declaring THE bottom is in and we’re going up from here. The Bears are smugly observing what they think is just another dead cat bounce on our way to lower prices. Who’s right?

What if they are both wrong?

Ms. Market loves to frustrate the largest amount of participants she can, as often as she can. And it seems to me the best way to frustrate the most people right now would be for U.S. stocks to tighten up and grind sideways for a little while. With that in mind, we have a nice ETF candidate to sell some delta neutral premium in while the next market direction sorts itself out. [Read more…]

[Options Premium] Going Long Abroad (sort of)

January 7, 2019 by Sean McLaughlin

So far, the Christmas Eve low in U.S. stocks is holding. Boy, wouldn’t that have a nice ring to it if it sticks and stocks eventually return to new all time highs? I’m not saying it will, but that sure would be interesting.

In the past week, stocks across the board firmed up. But I’m not one to put too much weigh on the first partial week of trading activity to ring in the New Year. I think this coming week will give us a better indication of where the path of least resistance is.

So while I’m not yet convinced it is safe to buy here in the U.S., there is some tempting mean reversion happening in Latin America that has us interested. [Read more…]

[Options Premium] A Friendly Teller

January 3, 2019 by Sean McLaughlin

We’re headed back to our friendly neighborhood bank teller at JP Morgan Chase. She seems to like handing us cash. Twice she has been quite generous to us and the post-Christmas bounce in shares of $JPM gives us extra interest in coming back for a third helping. [Read more…]

[Options Premium] Hold Your Fire

January 2, 2019 by Sean McLaughlin

Just as the final week of the year — the days between Christmas and New Year’s Day — are generally to be avoided by anyone looking to put new options trades on, so too are the first couple trading days of any new year. Especially this one. It was highly unlikely you were going to make your year by trading during the holidays, and similarly, there’s no reason to believe that any trades you nail on the first trading days of 2019 will be memorable this time next year.

As I type this at 12:45am ET, overnight S&P Futures have already traded as high as +34 and as low as -25 from Monday’s close. And I expect further indecisiveness to be pervasive during the first two full trading days in 2019. Sure, the nimblest of day traders likely will have a lot of action this week to make it worth their while, but those of us looking to put on options spreads with several weeks or months until expiration will best be served letting some of the nuttiness of the first 48 hours shake out. As such, we’ll be sitting on our hands until the end of the week, waiting until Friday to put on our first new position of 2019 (stay tuned!).

Meanwhile, we do have open positions with January expirations that will warrant our attention this week. Here is a quick breakdown of current positions with January expirations that we’re still in (haven’t hit our profit targets): [Read more…]

[Options Premium] How to Use All Star Options

December 31, 2018 by Sean McLaughlin

Happy New Year everyone! We’re happy you’re here. 2018 was a great first year for All Star Options. We pulled some profits out the market in both directions, we had some fun, and its been an incredibly rewarding challenge for me personally to share my experience with all of you and teach you some of the tricks of the trade I’ve learned in my 20 years tackling the markets.

We always welcome questions from the community about existing trades, questions about position management, and questions about our insight into various scenarios and trade ideas. And as such, I thought I’d take some time today, as we head into the new year, to lay out the way we think All Star Options subscribers can get the most out of their experience here and address some common requests we receive. [Read more…]