MTM Options Trader Newsletter - Don’t Roll Your Short Option Too Soon

[image]() [image] This Week in the Market The market made a sharp move lower this past week as the S&P 500 was able to find a little support from its 200-day moving average on Friday. Whether that level will hold this week is anyone’s guess. The three major indexes are extended to the downside, but that does not mean they cannot drop further, especially with all the global uncertainty and unrest currently taking place. Add in the House struggling to find a new speaker, and you have quite the mess and certain volatility. Speaking of volatility, implied volatility levels shot higher but did not close at the high of the week as a bullish reversal may be on deck this week. As mentioned above, there is a lot going on in the world that can move the market. Be on alert. Aside from the wars and conflicts, there are several economic reports due out this week, especially at the tail end, including the latest GDP figure. Quarterly earnings continue to roll as well, with several big-name stocks on the docket. As always, buckle up for an expected bumpy ride. Have a healthy, safe and pleasant week! Oct 25: New Home Sales Oct 26: Jobless Claims Oct 26: GDP Oct 26: Durable Goods Oct 26: Trade Balance Oct 26: Pending Home Sales Oct 27: Personal Income and Spending Oct 27: Consumer Sentiment [Read Our Blog](=) Don’t Roll Your Short Option Too Soon There are lots of mistakes you can make as an option trader, let alone as a human being. Let’s be honest, some just can’t be helped. But you can prevent rolling a short option too soon if you practice a little patience. Let’s take a look at what I mean by that. Short Premium Selling an option seems fairly simple if you look at it objectively. But selling premium has so many different risks and nuances that it can sometimes drive an option trader to do irrational things like managing a trade poorly. What I have witnessed in over two decades of teaching options is that many option traders don’t adhere to their trading plans when covered calls and time spreads are involved. [Continue Reading …](=) MTM Watchlist Here are a few trade ideas we will most likely look at in group coaching this week: SPY – With the ETF close to its 200-day moving average, there are several possibilities including calendars and vertical debits and credits. We will examine all of them and look for an edge. NFLX – After a monster gap higher following earnings, the stock has settled in around the $400 level where its 50-day moving average currently resides. Long 400 calendars worked well this past week and may be considered again. NVDA – After a big run higher, the stock has leveled off and dropped below several support levels. Bear call spreads above those potential resistance levels will be explored. [image]( The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by emailing investorservices@theocc .com; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2023. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States