Live: Tuesday, July 16, 2019

4:40 p.m. New York time

No fills on today’s orders.

12 a.m. New York time

As I mention often, my trading strategy for the most part derives from work done by the team at TastyTrade, a research and education organization founded by Tom Sosnoff, a former option floor trader in Chicago.

The biggest counter-intuitive element of the TastyTrade approach their handling of theta, the decline in options prices as expiration approach. They take an early management approach, exiting trades 21 days before expiration. The conventional wisdom, and all of my teachers when I was learning about trading, say that most of the profit comes at the very end, the week of expiration.

In this segment of their program “Market Measures” from Monday, Tom and former market maker Tony Battista discuss the two approaches and why they have concluded that early management is the best practice.

I highly recommend it.

10:45 a.m. New York time

XBI is again approaching 50% of maximum potential profit, and I have placed an exit order for a $0.33 debit.

9:35 a.m. New York time

As I did yesterday, I have today placed exit orders on IWM for a $0.21 debit and KRE for an $0.18 debit, each being 50% of maximum potential profit.

By Tim Bovee, Portland, Oregon, July 16, 2019

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.