The following are the main points of Simpler Trading’s the Options Defense Course:
- With a calm mind, learn about trading psychology and how to exploit crowd reactions for spectacular returns.
- Long options, debit spreads, and diagonals are all covered.
- Best practices for risk management when trading long options, debit spreads, diagonals, credit spreads, and other spreads.
- Trading strategies for the iron condor, iron butterfly, broken wing butterfly, and other options.
- Insights into the monthly and weekly calendar defenses, as well as a Q&A session.
- Knowledge about how to win at options trading
- And there’s so much more!
Meet Bruce Marshall – the Options Defense Course provider
Bruce Marshall is noted for his meticulous preparation and research. As a result, the tactics he teaches in the Simpler Trading classes are all tried and true. He understands the importance of technical analysis in developing trading strategies and tactics. Bruce Marshall has strategies and signs that you can learn from. You can cut down on the time it takes to become a great option trader.
For practical insights and personal comprehension, he mixes instructions on methodology and setup with descriptions of case studies and instances. At Simpler Trading, he is presently the Senior Director of Options and Income Trading. When you take his classes, you can expect to learn about his unique approaches to options trading and risk management. (especiallyespeciall in the Options Defense Course)
What Is The Best Way To Defend An Option Position?
All of our trades would be winners in an ideal world. Regrettably, we must keep in mind that trading the tastytrade manner carries risk. Even the most likely trades will lose money from time to time. As a result, having rolling and closing mechanisms in place is critical. Let’s begin with the significance of account size.
ACCOUNT SIZE IMPORTANCE
Larger accounts come with a variety of perks that smaller accounts don’t. For example, if a deal goes against us in a large account, we might keep the losing trade and roll it over indefinitely in the hopes that the trade would ultimately go our way and we will be able to exit with a profit. In a smaller account, this is more difficult because losing trades can eat away a bigger portion of the capital. In a large account, it’s far easier to keep our individual transaction risk low in relation to our portfolio than it is in a small account. We must make a decision if we have a losing trade in a little or large account. We must choose whether to roll the position forward in time to keep the dream alive, or to cancel it at a loss to protect the account’s worth. We examine the following factors before making this decision:
Based on historical data, we have discovered an optimal closing point for trades through our study. We looked at closing our deal at a multiple of the premium obtained when selling premiums. For example, if we receive $1.00 for selling an option, we calculated the overall profit/loss by terminating the trade at a 1x loss, 2x loss, 3x loss, and so on.
We discovered that canceling our deal at a net loss of 2x the credit received is sometimes the best option.
This indicates that if we collect $1.00, the deal will be closed when the option’s value reaches $3.00. This would result in a $2.00 loss. We found that this closing point gives us wiggle room for the trade to revert back to profitability, but also protects us from further losses.