A lot of things make Option Pit someplace special.
We only have professional traders here, and by that I mean everyone running our services has worked on a trading floor.
That matters, because once you've stood on a floor, making money trading is the only thing you really want to do.
So when we talk about a trade we like, we actually do that trade.
But I take it a step further.
One thing I really like to do is teach with real money. That means when I'm showing a trading example, I'm using my own account, with live money, to show how to execute the trade I'm teaching.
Say I want to show someone the right way to buy an option, a spread, or a cash zone trade (a butterfly-based setup with defined risk and a set profit target). I'll drum up an example live in the market and trade it, so folks can see the execution firsthand.
Paper money is great when you're starting out. But you can't learn the nuances of getting in and out of an option trade in a simulated market. Simulated fills come way too easy compared to the real thing.
Sometimes that costs me a few dollars here and there. But often it makes me money, because I'm the one setting up the example and I'm not going to put on a cruddy trade. And when it works, my students make money right along with me.
Let's take today in 0DTE (zero-days-to-expiration options, contracts that expire the same day). I was showing my traders how to "set and forget" a cash zone and aim to lock in a 100 percent gain.
Because I want them building good habits, I started by walking through how to find the cash zone. Then I set up a trade with strong risk-reward that could reasonably work.
Without getting too deep into it, I set up a cash zone 20 points wide and paid $1.00 for it.
To finish the lesson, I walked through the set-and-forget part and offered it back out at $2.00, which would double the money on that $1.00 debit. Normally, if this were an official trade, I'd work at least four or five of these cash zones. In this example I did just one contract.
Then I forgot about the trade and moved on to my next live session. Midway through, I heard the ring of an order getting filled. Yeah, the cash zone I forgot about sold at $2.00. GO me!
Then I checked the 0DTE chat. A bunch of my traders had done the live trade right alongside me, some of them working several cash zones.
Needless to say, they were happy. They got even happier into the close, when the portion of the cash zone we let expire returned 722 percent per spread.
Now, do I tell traders to live trade every one of my lessons? Of course not. But because we teach the trade and execute it properly from start to finish, nobody tends to regret following along.
So why do I teach with live money? Because it's the only way to truly show how a trade works, and the only way you see firsthand how I get in and out.
If you want to watch me do exactly this in real time, come join me at our Perfect Trade 0DTE event. I'll walk through how I find these cash zones and put real money to work, live.
Your only option,
Mark Sebastian
P.S. Save the date for the Pitties, our very first Option Pit award show, going live 7/7 at 7pm ET. It's our night to tip our hats to the members and readers who make this whole thing worth doing. That's you. Tap here to join us.