After starting my new strategy of premium selling on a more consistent basis there are many observations I have had about the successful trades and the failures. Selecting options to sell is not simply choosing a strike that you do not think will be hit, but rather making sure that the risk/reward is good enough that you do not get forced out of a position on a small intra-day move. It is important to manage one’s risk effectively to avoid panic in these trades. In this article I am going to go over this past week’s premium selling trades, particular what I learned from the losers and how it can benefit us to learn from them and avoid the same mistakes going forward. While overall it looks to be a successful week, my goal Is for at least 80% to be winners rather than just around 50%.
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August 4th, 2016 Watch List
Morning Perspective: More Central Bank Action
Premium Selling Trade: #1 For August 19th (Monthly) Expiration
The following is the third premium selling trade for August 5th expiration: The goal is to try to get around 3 premium selling ideas per week targeting 10-20% in gains. Given the nature of the trade all of the trades will have stops set in place given the exponential loss potential. Premium selling is a great way to bring in cash flow as well as put on a trade playing for a range in a stock.
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