mistake #4- Thinking you're smarter than you really are, so you end up making dumb moves that cost a fortune. BUT, i promise this, you cant learn in depth info without screwing up a bunch of money sooo...🤕🤕🤕. THANKS SMB CAPITAL! for being here for us retailers. If it weren't for you guys I'd have never made it this far! All y'alls vids and advice and staying fresh has helped myself beyond words, it's helped in actual cash cash I've made! TY! Been 2 yrs now and im a break even/slightly profitable options trader. Took like 1.5 yrs to get this far plus losing a lot(not losing a ton of money tho, only about a half ton lol)
I have made mistake #2. Now I'm realizing to just manage risk at all times. Trade small. I went all in a month ago or 2 & set myself back big time, after experiencing a winning streak. Now I'm realizing I have to look at my trading as one long lifetime of careful trading. Instead of racing towards a specific number that will allow me to do this full time. Patience.
I was in an August 29th trade, that did similar. The down move happened before lunch and I had to roll out to Sept 09, then to October 31 and Manage the position until Expiration. I was able to get out after 100 total trades (24 adjustments) for a 1% profit (Breakeven). The most I've ever had to fight a position.
Great video, I just learned the first and second lessons the hard way this week. Was on a winning streak for about a month and a half doing iron condors, so moved to a slightly higher delta to capture more credit and increased my lot size too soon. The underlying stock blew way past my position on a positive catalyst and took out about 80% of my profits from my winning streak. On a positive note, I am glad I learned this now before ignorantly stepping into a trade with even more lots down the road and completely blowing up my account. Thanks again for another amazing lesson to help us all out.
Despite the fact that I invest, I am frustrated by my incapacity to assess each company's performance and determine whether or not this is the best time to buy stocks. Inflation is depleting my monetary reserves. I need reliable market trajectory data at this point, but I'm not sure what to do.
There are numerous opportunities to produce substantial gains, particularly in this poor market, but such sophisticated transactions can only be carried out by seasoned market professionals.
I completely agree, which is why I think it's important to delegate decision-making responsibility to an investment coach. Underperformance is essentially unimaginable given their specialized experience and education, as well as the fact that each of their skills is focused on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable events. Working with an investment coach for over two years, I've made over $1.5 million.
@@danieljackson87 That's something I've been considering. I have a lot of stocks that I've kept, but they're starting to lose value, so I'm not sure if I should keep them or sell them. Hiring your investment coach would make it much easier for me to rebuild my portfolio.
Hi Seth! Thanks for the informative video. Maybe you could in another video discuss how traders at your firm practice the management of the trade in example number one. Anyone who just lets the price overrun their option spread and allows the in-the-money position to just expire at market close without taking any protective action could definitely use your advice. Setting a Delta limit to serve as a point or line in the sand where protective actions, like rolling the iron condor's wing up or down or closing it, while possibly adjusting the size of the opposite side or adding another spread to the opposite side of the closed position are valid choices in managing the trade. These options help minimize losses while possibly keeping some premium, even if it's less than the initial collection.
In options trading there is always a trade off and this is a great example of that, nice series overall, well presented, clear, sans nonsense, thank you.
I make mistake 3 for stocks I am long on. However I correct for it by rolling forward. And collecting a little more premium. Yes it's a little more work, but I get the best of both worlds.
That's right Mark! Rolling is the silver bullet to writing options! Roll right until you're right! Or maybe...roll until you're rolling in the dough!!! ;)🤑
Thanks Seth ! Great Video. I like the "take away" "pitfall". Unfortunately, when this happen, usually it surprises the trader because it happen so quick. Many times, the trader are neither psychologically nor operationally ready to take appropriate action to stop loss. Especially, when a trader has been winning for multiple consecutive trades and he or she believe so much that the short strike will not be breached. The mathematic calculation part is easy but the tough part is the "mind" and the "art" part of the trading.
I can't tell you how much I've lost in opportunity profit with #3. I would say, 'omg, I'd love to get called if it goes to that price', only to regret it. Even 16-delta CC got me in the past. Nice job Seth!
For Scenario 1 I would have used Fib, VWAP and Ichimoku to get the "sweet spot" of the Iron Condor. I would have compared the 1 hr and 30 min to the delta to figure out delta accuracy and if it fits my strategy for profitability. This would have lead me to spread the Condor as I took profits thus not to get stuck with the stock. For Scenario 2 I would have sold calls at said bullish target not worrying about immediate premium as call sale price was real target. The longer the stock takes to meet set call price the more premium is added to profits.
While mistake number 3 is a mistake the result of making that mistake 12 times in a row is still pretty amazing. In just 5 years you would turn 100k in to 1.2m at 23 percent return every 5 months.
Honestly? The third example doesn't sound all that unreasonable. A 23% return in half a year is still pretty good, though I personally would have given myself a little more room for stock price to grow by selling the $210 or $215 strikes. Also worth noting that this example is pretty cherry-picked, as this particular run-up was close to the peak for TSLA in 2023, and it has since sold back off, not quite to $195, but to the low $200s, so buying and holding, as somebody expecting the price to hit $300 might do, would have yielded little more at this point, and you'd still be in the trade instead of out of it in July.
I know its not a part of it but he could have rolled the tesla stock as it got to the strike price. Give a little profit back and sell at the higher price.
If you’re doing a covered call in “mistake number 3” and the price was going to force you to sell. Could you have not rolled that and raised the strike price further so you don’t get exercised?
I hate when i do a spread and let it expire into the close and after hours it pops just right between my spread, I gets exercised and then following week it goes even higher left me without my hedge 😂
Can you fix mistake number 3 by buying the call once it starts to go too far past you call for instance say it went to 215 but you had the 195 sell call. Could you buy the 195 call to cancel your current 195 sell call (yes it would cost a bit) but would be worth it because the stock shot to 260. So you still collected some of the premium and still made all the profit from the stock going to 260. Am I right?
What would you have made if you just held the Tesla shares,........purely speculative, no one has a crystal ball. The Tesla covered call trade was a great trade, a handsome return on investment( 26 % ) and nothing to whine about.
Thst is the issue when you lose , you said for whatever technical or fundamental reason in the tsla trade , it was most likely for whatever emotional reason
Anyone have any advice for what to do if a stock runs up or runs down severely during after hours ? This has happened to me several times while in a spread and has caused very large losses There is not much you can do since most of us cannot trade during after hours and you wake up to major losses. I feel like my only option is to stay super far out of the money lower my chances of blowing past my strike prices. I may have to incorporate the delta 10 to what i am choosing for my spread values.
I do not understand the comment at 23:00 that you should set the strike price lower than your target price . Surely you want to set the strike price above your target price not below ?
I never understood why the probability of the 1st case is 80%. With delta 10 the probability is about 10% and the market can only go up or down. So there is a 10% chance. The market cannot be on both sides at the same time, so adding 10% + 10% is incorrect.
I’ve been buying the golden ticket NVDA for 4 yrs. My last batch was 3 months ago @ $400. Super bullish on AI and don’t really want to sell. But I sold a covered call @ $850 last wk exp 2/23 right after earnings for almost $1k premium. If the stock price jumps $150 in the next 2 wks, I’d be pretty happy with a 120% profit after 3 months + the call premium. I’m thinking NVDA can’t go straight up forever. I’ll find out if this was a mistake in 2 wks. Am I crazy?
Free Options Trading Course: tinyurl.com/4txmtnux
mistake #4- Thinking you're smarter than you really are, so you end up making dumb moves that cost a fortune. BUT, i promise this, you cant learn in depth info without screwing up a bunch of money sooo...🤕🤕🤕. THANKS SMB CAPITAL! for being here for us retailers. If it weren't for you guys I'd have never made it this far! All y'alls vids and advice and staying fresh has helped myself beyond words, it's helped in actual cash cash I've made! TY! Been 2 yrs now and im a break even/slightly profitable options trader. Took like 1.5 yrs to get this far plus losing a lot(not losing a ton of money tho, only about a half ton lol)
Thank you for sharing... I'm sure I will be watching this several times as a reminder of what not to do...
I have made mistake #2. Now I'm realizing to just manage risk at all times. Trade small. I went all in a month ago or 2 & set myself back big time, after experiencing a winning streak. Now I'm realizing I have to look at my trading as one long lifetime of careful trading. Instead of racing towards a specific number that will allow me to do this full time. Patience.
Excellent perspective!! I'm starting off and trying to learn from others mistakes.
Exactly the lesson I learned my first month. I went from 1 to 5 to 10 contracts way too quickly.
I was in an August 29th trade, that did similar. The down move happened before lunch and I had to roll out to Sept 09, then to October 31 and Manage the position until Expiration. I was able to get out after 100 total trades (24 adjustments) for a 1% profit (Breakeven). The most I've ever had to fight a position.
Great video, I just learned the first and second lessons the hard way this week. Was on a winning streak for about a month and a half doing iron condors, so moved to a slightly higher delta to capture more credit and increased my lot size too soon. The underlying stock blew way past my position on a positive catalyst and took out about 80% of my profits from my winning streak. On a positive note, I am glad I learned this now before ignorantly stepping into a trade with even more lots down the road and completely blowing up my account. Thanks again for another amazing lesson to help us all out.
Despite the fact that I invest, I am frustrated by my incapacity to assess each company's performance and determine whether or not this is the best time to buy stocks. Inflation is depleting my monetary reserves. I need reliable market trajectory data at this point, but I'm not sure what to do.
There are numerous opportunities to produce substantial gains, particularly in this poor market, but such sophisticated transactions can only be carried out by seasoned market professionals.
I completely agree, which is why I think it's important to delegate decision-making responsibility to an investment coach. Underperformance is essentially unimaginable given their specialized experience and education, as well as the fact that each of their skills is focused on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable events. Working with an investment coach for over two years, I've made over $1.5 million.
@@danieljackson87 That's something I've been considering. I have a lot of stocks that I've kept, but they're starting to lose value, so I'm not sure if I should keep them or sell them. Hiring your investment coach would make it much easier for me to rebuild my portfolio.
Her name is Sharon Ann Meny can't divulge much. Most likely, the internet should have her basic info, you can research if you like.
dollar averaging into stock is the best thing to do as the market generally goes up, when it dips hard, and you have extra cash, buy more.
Hi Seth!
Thanks for the informative video.
Maybe you could in another video discuss how traders at your firm practice the management of the trade in example number one.
Anyone who just lets the price overrun their option spread and allows the in-the-money position to just expire at market close without taking any protective action could definitely use your advice.
Setting a Delta limit to serve as a point or line in the sand where protective actions, like rolling the iron condor's wing up or down or closing it, while possibly adjusting the size of the opposite side or adding another spread to the opposite side of the closed position are valid choices in managing the trade. These options help minimize losses while possibly keeping some premium, even if it's less than the initial collection.
In options trading there is always a trade off and this is a great example of that, nice series overall, well presented, clear, sans nonsense, thank you.
Finally they showed the downside possibility of all these strategies they teach!
I make mistake 3 for stocks I am long on. However I correct for it by rolling forward. And collecting a little more premium. Yes it's a little more work, but I get the best of both worlds.
That's the way
Yes. Keep on rolling, stocks go up and down.
The mistake made by novice traders is that they roll at the wrong time or do not understand how to complete the roll.
That's right Mark! Rolling is the silver bullet to writing options! Roll right until you're right! Or maybe...roll until you're rolling in the dough!!! ;)🤑
@@mrpremiumoftheoption116 Have I seen you on TJs show?
Thanks for this. One of the view people I follow who actually seem to give good education.
Legit af
Thanks Seth ! Great Video. I like the "take away" "pitfall". Unfortunately, when this happen, usually it surprises the trader because it happen so quick. Many times, the trader are neither psychologically nor operationally ready to take appropriate action to stop loss. Especially, when a trader has been winning for multiple consecutive trades and he or she believe so much that the short strike will not be breached. The mathematic calculation part is easy but the tough part is the "mind" and the "art" part of the trading.
Please tell us at what point of a loss it is best to manage the trade
This was clear, precise and insightful!
I can't tell you how much I've lost in opportunity profit with #3. I would say, 'omg, I'd love to get called if it goes to that price', only to regret it. Even 16-delta CC got me in the past. Nice job Seth!
For Scenario 1 I would have used Fib, VWAP and Ichimoku to get the "sweet spot" of the Iron Condor. I would have compared the 1 hr and 30 min to the delta to figure out delta accuracy and if it fits my strategy for profitability. This would have lead me to spread the Condor as I took profits thus not to get stuck with the stock.
For Scenario 2 I would have sold calls at said bullish target not worrying about immediate premium as call sale price was real target. The longer the stock takes to meet set call price the more premium is added to profits.
While mistake number 3 is a mistake the result of making that mistake 12 times in a row is still pretty amazing. In just 5 years you would turn 100k in to 1.2m at 23 percent return every 5 months.
As a discretionary trader, couldn’t you roll the bad leg?
Honestly? The third example doesn't sound all that unreasonable. A 23% return in half a year is still pretty good, though I personally would have given myself a little more room for stock price to grow by selling the $210 or $215 strikes.
Also worth noting that this example is pretty cherry-picked, as this particular run-up was close to the peak for TSLA in 2023, and it has since sold back off, not quite to $195, but to the low $200s, so buying and holding, as somebody expecting the price to hit $300 might do, would have yielded little more at this point, and you'd still be in the trade instead of out of it in July.
I know its not a part of it but he could have rolled the tesla stock as it got to the strike price. Give a little profit back and sell at the higher price.
Thank you .
If you’re doing a covered call in “mistake number 3” and the price was going to force you to sell. Could you have not rolled that and raised the strike price further so you don’t get exercised?
Why not just roll the call so you do not get assigned. Wish he would have talked about these strategies also.
I hate when i do a spread and let it expire into the close and after hours it pops just right between my spread, I gets exercised and then following week it goes even higher left me without my hedge 😂
Thank you for your videos. Is that alot of $$$ to put out to get a 10% return? Newbie small account
In the Tesla example - why not buy a couple of call options when the stock is on the way up?
This was excellent!
The covered call mistake happened to my WBA shares recently. I then just added some money to roll the call farther and up. Would that help?
Can you fix mistake number 3 by buying the call once it starts to go too far past you call for instance say it went to 215 but you had the 195 sell call. Could you buy the 195 call to cancel your current 195 sell call (yes it would cost a bit) but would be worth it because the stock shot to 260. So you still collected some of the premium and still made all the profit from the stock going to 260. Am I right?
Nice lesson on options 🙏
What would you have made if you just held the Tesla shares,........purely speculative, no one has a crystal ball. The Tesla covered call trade was a great trade, a handsome return on investment( 26 % ) and nothing to whine about.
Your tesla example why not roll up?
Thst is the issue when you lose , you said for whatever technical or fundamental reason in the tsla trade , it was most likely for whatever emotional reason
Shoot. This makes me look at myself and truthfully multiple wins didn't matter at all and one loss wipes out the account😢.
Is it not possible to roll the puts positions if case of a sell off rather than taking the full loss?
Why didnt he roll?
Where can you get the data on daily basis for the Delta ???
Anyone have any advice for what to do if a stock runs up or runs down severely during after hours ? This has happened to me several times while in a spread and has caused very large losses There is not much you can do since most of us cannot trade during after hours and you wake up to major losses. I feel like my only option is to stay super far out of the money lower my chances of blowing past my strike prices. I may have to incorporate the delta 10 to what i am choosing for my spread values.
I do not understand the comment at 23:00 that you should set the strike price lower than your target price . Surely you want to set the strike price above your target price not below ?
…strike price no… lower than your price target.
I never understood why the probability of the 1st case is 80%. With delta 10 the probability is about 10% and the market can only go up or down. So there is a 10% chance. The market cannot be on both sides at the same time, so adding 10% + 10% is incorrect.
Last point is silly
BUT IF THERE IS AN 80% CHANCE IT'S A WINER AND IT ONLY PROFITS 10%, IS THIS A LOSING BET?
Interesting, but I use a much simpler and consistently profitable options trading strategy. I’m good.
who in the right mind will sell a covered call if they are bullish on a ticker? thats dumb.... you would rather sell a covered put!
I’ve been buying the golden ticket NVDA for 4 yrs. My last batch was 3 months ago @ $400. Super bullish on AI and don’t really want to sell. But I sold a covered call @ $850 last wk exp 2/23 right after earnings for almost $1k premium. If the stock price jumps $150 in the next 2 wks, I’d be pretty happy with a 120% profit after 3 months + the call premium. I’m thinking NVDA can’t go straight up forever. I’ll find out if this was a mistake in 2 wks. Am I crazy?
If you're a little bullish and want to get out at a profit, covered calls work well. Then write naked puts and get the shares back.
Its called rolling
Sell far OOTM and short term calls 😁😁😁