Option Trading Requires You to Put Your Balls on the Line

Features-transparency

I truly apologize for the title of this post, but it's the only way I can get my  exact point across. Option Trading is EXTREMELY difficult compared to trading regular common stock. Making money on options requires big moves  in the underlying security (up or down) . A stock can move 3% over 3-day period and someone long the stock can be up, while an option trader may still be red  or even down 50% or more on the trade.

Which is why those posting option trades after the fact, with screenshots showing huge positions, rubs me the wrong way.I will be the first to say I have plenty of losing/expiring option trades. Its part of what I do and my strategy. I try my best to post my trade ideas, entries, and exits in real time via twitter and Stocktwits. Doing this makes me"ACCOUNTABLE", Makes me transparent, and puts my, shall I say, "BALLS ON THE LINE".

Which brings me to today. Twitter (TWTR) is a stock Optionmillionaires.com has taken some heat over. Back in May, when there was a big lockup expiration, we took some bullish bets on the stock, only to have our butts handed to us. But we still believed in the story. It took some guts to remain true to our bullish bet, and UPB came out with another post explaining the bullish position he was going to take on Twitter (TWTR) before earnings : http://www.optionmillionaires.com/twitter-earnings-72914/

We also put Twitter(TWTR) on our morning watchlist : http://www.optionmillionaires.com/july-29th-2014-watch-list/

And this is what I said :

After the close today we have a much anticipated report from TWTR. I agree with UPB and think TWTR gets back above $40 and will look for some calls today. (you can read his thoughts here : http://www.optionmillionaires.com/man-enough-twitter/ and here: http://www.optionmillionaires.com/twitter-earnings-72914/ ).I added YELP yesterday and will also look to add my SAM position today.

And this was the positions we were looking at:

Stock Ticker

Call/Put

Strike

Expiration

Closing Price

Possible Entry Price

SAM

CALL 

$280.00

August

.45 X .60

0.55

TWTR

CALL 

$44.00

Weekly

.38 X .40

0.40

 

 

We then alerted the Twitter(TWTR) position via our Private Twitter feed:

TWTR 44.50 calls

Those calls were over $6 out of the money with a little more than 3 days left before they expired, which is what I would also call, "Putting your balls on the line"

We also alerted this trade to the public via our twitter feed :

Twitter calls OM 7-29-14

And on StockTwits as well:

Twitter stocktwits

 

We also continued to state our position via Twitter:

Twitter 2

 

The rest is history, as Twitter(TWTR) reported a phenomenal quarter that bested expectations, and the stock rose over 30% in the after-hours session, meaning any option trader holding calls, will be rewarded handsomely at the open with most of the strikes being up over 1000% - with the calls we have being worth at least $5.50 from the .36 entry or $360 into $5,500.

Th easy way out in this day and age of Social Media? Posting many trade ideas, no specific strategy, then boasting about the winning trade after the fact. The hard way? Posting trades in real time for all to see, being transparent, than sticking around for the accountability.

This is not something new at Optionmillionaires.com. You can see our recent thoughts on Zillow(Z) when it was under $100 and most were calling for a move to $20(we called for $150): http://www.optionmillionaires.com/zillow-z-headed/

The move on LinkedIn when no one else believed in the stock : http://www.optionmillionaires.com/linkedin-lnkd-finally-hit-150-on-blow-out-earnings-report/

OpenTable Buyout, before Priceline made the offer: http://www.optionmillionaires.com/opentable-open-trade-options/

Netflix at the bottom : http://www.optionmillionaires.com/netflix-nflx-why-we-trade-options-follow-up/

And of course, our call for the S&P to crack 2000 and the $SPY to break $200 in 2014 : http://www.optionmillionaires.com/market-headed-higher-part-2/

As this age of Social Media makes the old lumbering market experts of the past irrelevant (you know who they are), lets all work together, to make the market of the future, one filled with transparency, and hopefully prosperity.

Now run to the moon tomorrow Twitter (TWTR) you piece of shit..

- JB

JimmyBob (Scott)has been trading equities for over 15 years, a majority of which were OTC micro-cap stocks. He started trading high risk stock options over the past 7 years, and has proven winning trades in excess of 15,000%.

As one of the Co-Founders of optionmillionaires.com, Scott enjoys sharing his knowledge with other investors through timely blog posts, daily watch lists in the forum, weekly webinars, and helpful advice within the chatroom.

More Posts by JB: View All | Private Twitter Feed: Access Now! (For Diamond Members)

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