Yo Pit Crazies,
Path. Proximity. Profits.
The 3 Ps to successful and sustainable options trading starts with a new path, a new course on which to embark.
But, really, it boils down fundamental option strategy and an ability to see what is in front of us.
I’m here – every day – to help show my students how to do it.
Yesterday’s FOMC announcement had big expected moves and I put on a trade in the Wednesday Option Pit Mentoring session that can’t lose and has massive profit potential.
All with little risk.
So here is how I did it …
Learn to Read the Expected Move
That is what Proximity does in the trade. I show my students how to read the expected move and create a trade around that.
It’s all part of the OP Mentoring Path, baby …
Here it is in action.
With a large move expected, I bought short term puts in the SPDR S&P 500 trust (Ticker: SPY) and bought out-of-the-money calls in SPY for next week and a VIX put for May 18. My thinking was if the Fed wrecked everyone’s day, it would be yesterday. Good news might have some legs and bring the volatility down with it.
One-Day SPY Chart with one-minute candles
My letter here yesterday gave an inkling of how I was leaning.
The answer: just long enough.
If you want to see how to set up the trade, check it out here in this video.
I was able to close the strangle early with the position currently up 18%. If the VIX makes it to 20, there’s potential for 60% win
(Coincidentally, that one trade alone would pay for 20% of your annual Option Pit Mentoring course.)
The Lesson: Earn while you learn.
The Rundown
Option Shopper
Licia hit the exit in Kinder Morgan LLC (Ticker: KMI) for a 65% gain.
Nitro Trader
Mark comes back from Florida to a sunny ending to his trades AMC Entertainment Corp (Ticker: AMC)/Pfizer Inc. (Ticker: PFE) pair for a new 73% gain, and some SPDR Euro Stoxx 50 ETF (Ticker: FEZ) put flies for a 53% gain.
Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session.
Long-time student, Kiran running with the Pro Mentoring trade from Monday:
OP Mentoring
Our first Option Pit Essentials training is here … musing on calls and puts.
Power Income Trader
Bill closed out the last of the Cboe Volatility Index (Ticker: VIX) put spreads in Power Gains for a 65% total return.
We also hopped into a new Long VIX/ Long Invesco QQQ Trust (Ticker: QQQ) trade in our session that jumped to a nice 20% gain.
Power Gains is open for another quarter and here is how Bill and I did to wrap up the session for our closed trades.
VIX Edge/Vol Trade Club
I have three open positions in the VTC … all for 15-20% gains. and I can’t lose. If we get a 20 VIX, I will have those will kick to 20-100% gains.
To Your Trading Success,
AG