Rules of the Game
- Don’t break the rules.
- We are not swinging for the fences we are looking for high probability trading.
- Identify the location for the trade by looking the correct amount of days out until expiration.
- Look for a coservative ROI of between 6-14% to help you determine how much of a credit to get.
- Place the trade.
- Draw the short positions in Prophet so you can have a visual representation.
- Set your contingency buy back position to buy back your short or to close the entire trade.
- Go fishing!
- If the market moves up significantly, we will consider removing put spreads and adding call spreads.
- If the market moves down significantly, we will consider removing call spreads and adding put spreads.
- If we have made 80-90% of our profit, we will consider closing our entire trade.
- We can trade multiple months at the same time.
- Be aware of the seasonal, technical, and volatility exposure.
- If on the day of expiration the market is within 20 points of your short position, close the entire trade.
