🤑 The ‘Dark Money’ Guide to Day Trading Options 📆

[Image] It’s Time to Talk About Day Trading Options! Here’s what’s going on in the world of smart money today! In today’s Dark Money Trades rundown: - 🔑 Unlocking the hidden secrets to successful option scalping - 💰 2 interesting smart money bets from this morning - 🔫 Ben’s Bullets – 3 big ideas for the market this week 🤑 Dark Money Lesson: Everything You Need to Know About Day Trading Options 📆 If you’ve been following my trade alerts recently, you’ve probably noticed that I’ve been scalping a lot of positions—getting in and out on the same day. For example, last week I went over an alert I sent on Sea Ltd. (NASDAQ: SE) where you could’ve potentially made 85% in three hours. But to nail plays like this, you need to understand the special considerations required to day trade options like a pro. Scalping common shares is difficult enough, but day trading options is even more complicated. That said, don’t be discouraged by this… The risk may be large, but rewards can be enormous (as evidenced by SE) if you know how to do it. Why I Love Day Trading Day trading — when you buy and sell a stock or option in a single trading day — is the bread and butter of my trading strategy. While swing traders and long-term investors can hold stocks for weeks, months, or years … I’m in and out of my positions quickly. Sometimes in minutes. And often multiple times per day. I prefer day trading for a variety of reasons… - I sleep better knowing I’m not holding positions overnight… - I avoid getting trapped in ‘hold-and-hope’ swing trades… - If I’m correct on the timing and direction of my trade, I bag much more significant gains on weekly options than I would on monthly options (or common shares)… However, everything in the stock market is a double-edged sword. And with great potential reward comes major risk as well… WARNING: If your timing is off—even ever-so-slightly—your weekly options contracts can drop 30%-50% in minutes! So, how can you avoid your contracts taking a haircut like this? There are two key areas to focus on… How to Pick the Right Strike Price First, let’s talk about strike prices. You should avoid trading contracts that are too far out of the money (OTM). If you buy a contract that’s far out of the money — and the underlying stock hits that number by your expiration date — you’ll make a bigger % gain than if you had bought at the money (ATM) contracts. On the other hand, if you’re holding OTM contracts and you’re wrong about the direction — even for a few hours — your position could lose more than half of its value. NOTE: I usually trade strikes that are very close to the money, but slightly out of it, which gives me a solid risk/reward on the trade. Beyond strike prices, there’s another factor to consider… How to Pick the Right Expiration Date This is the real key to day trading options successfully — you’ve gotta pick the right expiration date. If you have a strong conviction that the move will happen soon, you should press your edge and buy weekly options. But for any trade where you have less than A+ confidence in an immediate move, you should buy longer-dated contracts. I tend to avoid swing positions for the most part, although I do trade them occasionally (more on that later)... My trading style usually involves buying short-dated contracts that are close to the money. For me, however, it’s all about what I see on my Spyder Scanner. You’ve gotta figure out the risk/reward relationship that perfectly fits your personality, account size, and risk tolerance. Bottom Line: By simply focusing on your choice of strike prices and expiration dates, you could potentially improve your entire day trading strategy… And speaking of trading, it’s time to go over… 💰The Biggest Smart-Money Bets of the Week💰 🔴 $2,940,000 bullish bet on UBER JAN 19th 2024 $62.50 calls @ $1.72 (seen on 12/4) Uber Technologies Inc. (NYSE: UBER) has been blasting off recently following news that the stock will be added to the S&P 500. The stock is up more than 23% in the past month, yet one ‘smart money’ trader is betting that the rally has further to go, wagering nearly $3 million that UBER will trade above $62.50 by mid-January. This one catches my attention because I recently made a killer trade on UBER, one of the times I expanded my horizons and held swing contracts for almost a month. On November 8, I bought UBER 12/8/2023 $51 calls for $1.60. Yesterday, I sold those same contracts for $9.00—a profit of 462%! Bottom Line: Keep these $62.50 contracts on your watchlist. 🔴 $337,000 bullish bet on AAL FEB 16th $15 calls @ $0.40 (seen on 12/4) I couldn’t help but take note of this MASSIVE bet on American Airlines Group Inc. (NASDAQ: AAL) yesterday. Someone is betting $337,000 that AAL will trade above $15 by mid-February. I like this setup because of where the chart is sitting. AAL has had a volatile year and the stock is down 10% in the past six months. But recently, it seems as if AAL has found a near-term bottom at $10.92. Since hitting that level, AAL has surged more than 13% in the past month. The trend is in our favor trading these contracts. Watch AAL closely over the next two months. 🔫 Ben’s Bullets for the Week 3 interesting ideas I’m keeping an eye on in the market this week: - RILY DEC 15th $20 puts - GME DEC 15th $20 calls - F DEC 22nd $12 puts Happy trading, Ben Sturgill P.S. Discovery how Tim Sykes’ brand-new AI trading algorithm—XGPT—is crushing the markets! 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