In the past 12 weeks I have had a tough time being away from my passion of trading. It has been so tough because our little daughter has food allergies. If I make a mistake and eat something wrong I am spending 4-6 hours with her crying in my arms. This sort of unpredicatbility has me watching the market from the sidelines.
That is until I figured out a strategy swing trading with options. Just like with trading individual shares you want to make sure that you are in an option that has the volume to be able to get in and out easily. You dont want to get into a trade and get stuck because there is no one to buy the option you are trying to sell.
As I get my feet wet again in trading I am trading with a smaller account that was at $950. In the past week with my swing trades I am up a nice $300. which is roughly 30% in a week. Not quite as lucrative as the quick moving low float stocks, but still building a profit.
I do enjoy the low float runners where you can be in and out with a nice 50%-300% profit in less than 30 min. However with my limitation right now I had to adapt to a trading style that works with my time ability to be in front of the computer to watch the stocks.
I will usually check the scan right at open and see which gappers have the best option volume. The first red day for sell off stocks that are optionable tend to be good for a put option returning a nice 20% profit for a day trade. Then for the second or third day when the stock begins to curl back up a call in the money for a monthly expiration is working well for a slower swing trade. Right now I am swinging XBIT and PPC calls.
I have found that the weekly options are better for intraday scalp trades and the monthlies with momentum are better for a swing trade. I am by no means an expert on options and taking it slowly with 1-2 contracts at once. It is a great way to leverage your capital and be able to make a nice profit when the trade goes in your direction.
However you need to definitely cut the loss quickly if it goes against you. In my eyes you have two things that can make a loss worse if you dont cut it. First you have the price action and then you also have the time decay. The closer to expiration the faster the option will devalue if out of the money.
I’m seeing the same support and resistance levels hold true in trading options, however you need to make sure you are in an actively traded option otherwise you can have a hard time exiting.
I never buy a contract at the bid because you will end up losing right from the get go. Instead I put in a price I’m willing to pay close to the bid. I have found trading in the trend of the day is more profitable than a reversal trade. This new strategy is teaching me patience in seeing the gains become realized. I am able to work on the book, take care of my daughter, and watch the stock in the background. Immediately after I buy my contract I put in a wish sell price in case someone buys on the ask by mistake.
This has all come about because my stock trading is more time consuming watching the whole market. My daughter is number one and when I have the time again I will be back full force.
In the meantime working hard to get my book out to you all for a June release. Quick update that the cover has been chosen, the website is in development and taking names for preorder and deal info when you sign up bit.ly/APJBKlist
I love hearing feedback from you. It makes my trading more personal and I like to hear how I can help you. If you have questions or comments you can contact me here or on Profitly, Twitter (@jane_yul), Instagram (missairplanejane), LinkedIn and Facebook (@sugarairplanejane). firstname.lastname@example.org or YouTube
And if you reach out to me and I dont respond immediately please don’t take it personally as I might get to it at a 2 or 3 am feeding while reading on my phone.
Working on my book to be released this spring of 2017 available on Amazon and major retailers. Sign up here list for updates about when and where to preorder.
Also testing out Stocks To Trade that has a 1 week $1 trial
For my charting and level 2 I use Equityfeed.
This blog is for information purposes. I am not a registered securities broker-dealer or an investment adviser. The information here is not intended as securities brokerage, investment or as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund.