14 comments

  1. avatar Richard Mowrey says:

    How does one find option trades? Dan talks about how if he can’t find an option trade that he’s willing to take he’s not going to recommend any to OMM members. So how would I go about searching for good option trades?

  2. avatar steveingeneva says:

    Richard – Finding Trades – Option trades can be made on most stocks or indices that you would trade shares on.
    Dan is waiting for High Probabilty trades where a few (or several) factors have come
    together at one time to raise the odds of the trade being successful. In the case of the VZ trade, if you listen close to
    Dan you will hear about the coiled spring or wedge pattern, this usually resolves to the upside in a bull market. Dan
    includes the factor of an announcement coming out in the news soon. He shows you the consolidation pattern. He notes
    the impending volatilty squeeze. He realizes that this sector and stock has been strong recently, and particularly
    resilient to a pullback with the rest of the market. The timing for the VZ trade is favorable. If you can find a stock with a
    confluence of positive factors, buy a couple calls and watch it closely. If you get a nice move in your favor, take profits.
    When we shift to a bear market, you will be looking for stocks with a negative confluence of factors. IMHO

  3. avatar sueberb says:

    Presently, I can olnly purchase an option in 2 ways, open to close or sell to open. Can any explain what this means? Am I correct to assume I can not carry out Dan’s trades until Fidelity approves my account for a more agressive goals. Thanks for any info. I am a beginnger in trading options.

    • avatar gtrader says:

      If you are a beginner trading options, then Dan’s video #5 says to all beginners to paper trade only while you learn, watch and build an understanding. Especially if you are unfamiliar with how to place a trade, any trade.

    • avatar somethingforcat says:

      You can only buy to close and sell to open becaue you are only allowed to write covered calls. You must own the stock and then can “sell to open” contracts against it. Then, if you wish, you can buy back the contracts by “buying to close”. If you want to be able to buy calls or do spreads, you need to tell them that you have some experience trading options (fill out the online form again).

  4. avatar steveingeneva says:

    I think I will wait before placing the VZ trade. If we get a “three day rule” pullback, it may be more prudent to get into the VZ 35 or 36
    strike calls. I am saying this because of the futures this morning being heavily red in color. You may get the 37’s for half price, but
    is this the trade that Dan had in mind? Can’t say.

  5. avatar Short_Horse says:

    @Dan – I like the path of focusing on identifying good trades rather than you feeling forced to find something for the members. I once heard a wise man say, “Do you really want to live in the best house in a crappy neighborhood?” I am definitely here to learn and exchange ideas; something I find invaluable on SMM. I would like to spend more time understanding strategy and executing well.

    Yesterday morning before I saw this, I actually re-entered a position on VZ APR $36 @ 1.00 and VZ MAY $36 @ 1.33. I debated the $37 but honestly decided on the $36 because I felt better about having that .44 in the money at the time I hit buy. My theory being I may get battered around a bit, but as long as I’m bouncing within tightening Bollinger Bands then I’m fine. Positioning for an expansion. Am I thinking correctly?

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