The S&P 500 is back near highs. Call me crazy, but bullish setups in this environment with low volatility in the options get my antennae up for my favorite bullish strategy -- the simple long call. (Keep it simple, slugger!)

Warning: This aggressive strategy is only for those who are comfortable with risk and want to Bro Down ;)

In a previous post, I discussed using Vertical Spreads to roll long in-the-money calls up to protect profits while not giving up the dream of higher prices. Any time I'm holding long calls that are way in-the-money, this is a viable option to help me take money off the table -- freeing it up to be redeployed elsewhere -- but still leaves me a chance to participate if the stock continues moving higher (in the off-chance I didn't perfectly call the top /sarcasm).

I promised an aggressive cousin to this strategy and here it goes...

Sifting through all the trade ideas from the latest All Star Charts Quarterly Playbook, I happened upon a stock that is still several weeks away from earnings, is just a touch below all time highs, is trading at its lowest volatility of the year, and has a clearly defined risk management level. As you can imagine, this is pretty damn near the perfect set up for my favorite options play...

Earlier in the week, JC & I were chatting online about some possible trade opportunities, and we had the following riff on Microsoft $MSFT:

JC: Hey, $MSFT long straddles.

Sean: You in? or are you asking if it's a good idea?

JC: I think it's tight. It either breaks out and rips, or just get absolutely destroyed.

Sean: Yeah. Vol is a little higher than I'd prefer for that trade. But if you think a move is imminent soon, I don't hate it.

JC: I think it breaks out. But like $XLK in October, if it doesn't it's over. It's either a "good buy" or a "goodbye."

Sean: A couple more days of sideways action might lower the vol a little more, which would make me happy :)

Fast forward to today and $MSFT volatility has come in a smidgen.

A funny thing about Gold is, people who have any kind of opinion on it are either EXTREMELY bullish, or EXTREMELY bearish. There tends not to be any middle ground. No surprise it is such a politicized instrument.

Well, I don't care about any of that. What I do care about is volatility priced into options in this space continues to be pretty juicy at the moment while prices of many Gold underlyings appear to be stuck in a sideways holding pattern. (You won't hear any talking head loudly yell on CNBC: "I THINK GOLD GOES SIDEWAYS!" LOL).

And the boys at ASC agree with me, having published a neutral opinion on it in their recently published ASC 4th Quarter Playbook. So let's get into the play that makes most sense from here.

Quick little post offering a teachable moment in a currently open position on my books.

Risk management is Rule #1.

Last month, I put a trade on that didn't work out. Believe me, it happens (shocking, I know! /EndObviousSarcasm). There was a level that invalidated my thesis and it was breached. I don't fight with price action. When price is speaking, I listen. So the trade was exited and I moved on, accepting my manageable loss.

Fast forward just one week from my exit and the chart has repaired itself and has established a newer, clearer level to lean my risk management against. My overall bullish thesis on this stock hasn't changed, and now with new levels to observe, I'm going back in for a new try with a similar spread, but at new strikes and a new expiration.

Geez... the calendar turned into October and traders are acting like Halloween is already here! The up-and-down trading action so far in the first three days of October can be downright frightening if you're chasing every whipsaw in this schizo tape.

Considering my portfolio is leaning a bit long at the moment, it feels prudent to put some downside exposure on.

The biotech space has been a laggard all year. If broader markets still have additional spook in them, it is likely biotechs will lead the way. So I'm positioning myself accordingly.

This is the video recording of the October 2019 Conference Call for Members of All Star Options

Ok, today's title is a cheeky play on the ticker symbol I'm trading today. I couldn't help myself.

Today I'm getting into a low conviction trade, but shifting the probabilities in my favor so that even if I'm wrong, I still have a good chance of reaching my profit objective. Pretty sweet, right? This is one of the many reasons I like trading options.

It's that time again where we start heading into the next monthly expiration cycle and I review any options positions that remain open which might require some adjustments, monitoring, or closing before we get too close to expiration.

The October expiration cycle has been good to us. At the time of this writing, I've already closed two positions that hit my stop loss levels ($NKE, $DE), and two others that hit my profit objective ($GLD bull call spread, $PHM bull calendar spread). And as usual, the bulk of profits for this cycle came from just a couple trades.

These are the remaining open October positions that need some monitoring:

During the course of my day-to-day engagement with the markets and market participants, including subscribers to All Star Options, I'm often asked my thoughts about how I would manage some position that somebody is in. Usually goes something like this:

Sean, I've been in this inverted double reverse downward dog position and now I'm losing money. What should I do?

Ok, so I made up the name of the position, but you get my point. People do weird things and they are looking for help.

One commonality I get from people engaging with options is that they bought long-dated calls (sometimes Leaps) in stocks they are bullish on in lieu of buying stock. And they got lucky -- real lucky. So lucky in fact that they are sitting on enormous open profits on calls that are now WAY in the money.

But this has them in a bind.