Yo Pit Crazies,

If you missed it, check out my Weekly Profits Cycle webinar where I show my students a strategy that produced 26 of 30 winners, all closed via alert.  For real.

If you think that is good, my Easy Trade Button strategy is 9 for 9 lately  and would have paid for the service 5x over since Jan.  And I am working 2 open wins.  Heck every service, 5 that is, I have is up to decent money but I am not here for a victory lap.  

The question is why?  How am I doing this?  First, I am a volatility trader.  More on that in another post but the 2nd is I am decent and picking duration for my trades.

What is duration?  My definition is how long to stay in a trade relative to the time to expiration.  

The problem with options in a ‘want it all now” society is now, now, now but the trade might not move until then, then, then,  When time is up and I lose there is little recourse.  But a dead option is a dead option.  I can throw money at a losing idea but that is a new trade and more money.  It won’t bring the old money back.

Let’s walk through the basics of picking the right time to expiration of an option.

I buy more time than I think I need.

Every option trade needs an idea or opinion and an edge.  Folks use options because they have a hot idea, they assume they will be right and buy the cheapest option they can find to get the job done.

The problem is that it is usually some out of the money option with very little time to expiration.  Time is working against that option in the most oppressive way possible, steady, unyielding time decay.  Remember that time decay is the daily loss in an options value when volatility stays constant.

My solution is I buy more time than I need. 

If I expect to be in the trade for 10 days, I will use a 30 day option when buying calls or puts. if I am in a trade for 5 days, I will use a 2 week option cycle.  There are different trade types and variations.  For a 24 hold, 3-5 days to expiration depending on how high implied vol is.  0 DTE I let Mark handle unless I have an idea and I think the options will explode.  Possible after NFP numbers today, at least to 4600 SPX.

It is possible to reduce time decay by 80% or more for a 30 day hold  and that for sure is an edge. It is also the basis for my Weekly Profit Cycle product.  26 out of 30 wins have a reason!

To Your Trading Success,