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2021.08.23– SESSION 842 – OPTIONS TRADING FOR INCOME

12 replies, 5 voices Last updated by John Locke 1 month, 4 weeks ago
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    • #17854

      Sherri Locke
      Keymaster
      @KDAKSj4ux
      Going to The Trading Triangle LIVE 2016Ultimate Income Trader Workshop

      The trade logs and trading results spreadsheet for August expiration are ready to view! Enjoy!

      • #17875

        John Locke
        Keymaster
        @john-locke
        Going to The Trading Triangle LIVE 2016Locke In Your Success CoachAPM2Trade JournalsUltimate Income Trader Workshop

        This thread is closed. Please post further topics in next available OTFI meeting

    • #17833

      Ron van Steenoven
      Participant
      @ronvs@rvsa.ca
      Points: 455
      Rank: Freshman

      Hi John,

      Just a heads-up on the October M3 entry demonstrated today. You accidentally entered using September instead of October options.

      • #17835

        John Locke
        Keymaster
        @john-locke
        Going to The Trading Triangle LIVE 2016Locke In Your Success CoachAPM2Trade JournalsUltimate Income Trader Workshop

        Thanks Ron, I will make the correction next week.

    • #17832

      Warren Seeto
      Participant
      @warren@lifearcade.com
      Points: 154
      Rank: Newbie

      Hi John,

      Just a quick question regarding the Bear trade for 20 Aug 21. I noticed in the OTFI video that you put this on as a Put butterfly, however from the FIT strategy videos you mention that this is a Iron Butterfly (Bull Put + Bear Call) position.

      Wondering if the strategy has been updated since the original video or if they are interchangeable?

      Thanks in advance,
      Warren

      • #17834

        John Locke
        Keymaster
        @john-locke
        Going to The Trading Triangle LIVE 2016Locke In Your Success CoachAPM2Trade JournalsUltimate Income Trader Workshop

        @Warren, Since the Bear is managed without Greeks and solely through asset price points, P/L, and time triggers, it does not matter if you use put, call, or iron butterflies. I use put butterflies over iron in the demos because it is easier for me to distinguish it from the Bearish Butterfly in the examples.

      • #17851

        Warren Seeto
        Participant
        @warren@lifearcade.com
        Points: 154
        Rank: Newbie

        Thanks for clarifying that John.

        Would you also mind sharing what the adjustments were for this position? From the FIT videos, you mention there are 2 stages of adjustments at +40 and +60. Since the RUT pushed higher in the last 2 trading sessions, I was hoping you could clarify whether the short strikes are adjusted by the the same distance respectively (Ver 1) or whether they are adjusted based on the 17-27 strike under the asset price (Ver 2).

        Ver 1
        20/8/21: RUT @ 2167 -> 2090/2140/2190
        23/8/21: RUT @ 2208 (+41) -> 2130/2180/2230 (Adjustment 1)
        24/8/21: RUT @ 2230 (+63) -> 2150/2200/2250 (Adjustment 2)

        Ver 2
        20/8/21: RUT @ 2167 -> 2090/2140/2190
        23/8/21: RUT @ 2208 (+41) -> 2140/2190/2240 (Adjustment 1)
        24/8/21: RUT @ 2230 (+63) -> 2160/2210/2260 (Adjustment 2)

        Thanks,
        Warren

      • #17853

        John Locke
        Keymaster
        @john-locke
        Going to The Trading Triangle LIVE 2016Locke In Your Success CoachAPM2Trade JournalsUltimate Income Trader Workshop

        17-27 is used only for initial entry. Once trade is underway it is no longer relevant.

        Short strikes are always 20 points apart and added and/or rolled at predetermined asset price points based on the reference point.

        I do not know the reference point in your question but you would not have shorts at 2140, 2190, and 2110 since 2140 and 2190 are not 20 points apart. ASSUMING your reference point was at 2140 AND the asset price was 2230, your short strikes would be 2200, 2220, 2240

      • #17858

        Warren Seeto
        Participant
        @warren@lifearcade.com
        Points: 154
        Rank: Newbie

        Hi John,

        Thanks for clearing that up. Correct, the reference point for the initial entry was 2140.

        After reviewing the FIT videos again (took me a little while to wrap my head around it), I’m a lot clearer now on how the adjustments work. Based on this I calculated the following adjustment schedule which leaves me with the following strikes at 2200,2220 and 2240 that you highlighted above.

        As a follow-up question to this, what are you thoughts for doing an extended roll on this position? Right now seems like the RUT is approaching a key resistance level at around 2255. If it breaks out would you consider closing the 2200 and opening a 2260?

        Thanks,
        Warren

      • #17860

        John Locke
        Keymaster
        @john-locke
        Going to The Trading Triangle LIVE 2016Locke In Your Success CoachAPM2Trade JournalsUltimate Income Trader Workshop

        By guidelines we would do the extended roll if the trade is down <5% planned capital. If you’re asking about my thoughts on the RUT being higher, I’d largely key that off the SPX and how the RUT is reacting in reaction to it. With the current situation I would not expect the RUT to go much higher if at all in the short term but that can change rapidly based on new information coming into the charts.

      • #17863

        Warren Seeto
        Participant
        @warren@lifearcade.com
        Points: 154
        Rank: Newbie

        Gotcha – thanks again John.

    • #17829

      Sherri Locke
      Keymaster
      @KDAKSj4ux
      Going to The Trading Triangle LIVE 2016Ultimate Income Trader Workshop

      The recording of the Options Trading for Income by the Guidelines webinar from earlier today is ready to view. Enjoy!

    • #17802

      Jenica Locke
      Keymaster
      @Holzschuh8Jenica

      Please post your questions or trade review requests for this session at least 48 hours prior to the live session so we can prepare the most complete and detailed answers for you! Thank you!

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