After Further Review

It’s always good idea to review your trade exits a month or two later to see what would have happened had you not exited the trade. I make it a part of my end of month review for my accounts.

Hindsight as they say is 20-20 and seeing what unfolded just after you abandoned ship, for likely a good reason, may not have always been the greatest move. Exiting with any profit is always welcome, even if you didn’t catch a tidal wave and jumped off in a mud puddle.

After reviewing the most profitable option  trades over the last 10 months I noticed some trends I was unaware of up until this point. Directional calls or puts were my most profitable trades. Diagonals, calendars, ratios, spreads or iron condors and broken butterfly’s didn’t measure up to straight calls or puts.  It’s either a call or a put period. Sure there are circumstances where the short iron condor may be appropriate, but my simple plan calls for none of it.

It is either a Call or a Put, period.

SDH

Moreover these are the least expensive trade requiring only one contract to execute. You must watch your bottom line expenses when you run your trading as a business. Restaurants that can’t do that close rather quickly, as do traders.

If you’re not tracking your expenses you are not in the business of trading, you are gambling, hopefully still with the house’s money. Unfortunately this mindset leads to going all in mostly at the wrong time, thus casinos stay in business for a long time.

Choosing when to go long with a call or short the market with a put and leveraging your wager is what good trading decisions with options is all about. Relying on your own analysis after you become seasoned in this field builds confidence few others can replicate.

Enuf said.