Don't Be Early On A Trade

Disclaimer ** This blog post is being written as a supporting document for the author trade correctly**

Benefits of Waiting For Confirmation Before Trading

One issue that has plagued the trading of the account is getting into a trade too early. Not waiting for verification of the price action has caused a couple of Code Red trades for the account.

When looking for a trade, sometimes there will be possibilities that are almost ready to trade. The price is almost where it needs to be. But there is a pretty good rule out there that tells the trader to wait until the price has completely gotten to the point needed before trading. Because of greed, some traders will ignore this rule. They think that since the trade is going to a certain point anyway, why not just purchase the options now. That way, they can save money on the price of the option and, if the trade goes well, make more money than previously projected. This account is no different.

But the result on a couple of trades (UUP put trade and USO call trade) has been the exact opposite. There was resistance and support. The trades went completely  in the other direction. Had the account waited until the correct price point had been hit, the account would have saved some money.

So remember to wait for your technicals to confirm the trade. It might cost you a few dollars right away, but could end up saving you many more dollars in the future.

New Trade in SPY December $138 Options

There is a new trade. December SPY $138.00 call options were bought for $1.81. SPY is currently trading at $136.37. The December $138 call closed trading today at $1.83. Reasons for the trade are:

- Bullish technical action today (Hammer candlestick, RSI change, bullish daily MACD change)
- Fiscal Cliff discussions going well
- Japanese Gov't announced more monetary stimulus

 Previous trades include USO , IAU, PIN, SPY, XHB, FXF, and FXC options. 

If a more conservative approach is more to your trading style, Trading Futures ETF Options also follows Sell The Call, a blog covering all things covered call. 

**Disclaimer** - This is just trade and or futures options information. It is not a recommendation to buy or sell any of the securities mentioned in this blog. Do your Due Diligence before any trading or investing. 

New Addition To Worst Trades Ever

There had to be a full moon and there must have been a ladder walked under, a cat crossing the path, and an umbrella opened in the room. Because there is no other explanation for the mistake made on Friday.

It started with the UUP trade hitting the Code Red price and the ending of that trade happening. Hey, it happens. It is no big deal. The closing of this trade was the best part of the trading day. But what happened next was right out of crazyville.

As I was posting results on the Stocktwits account, it was noticed that Apple was getting a lot of attention for losing so much that day. It was after 2:30 Central Time. Why was Apple getting hammered so much? The price of the stock was around $576 at the time. A look at the options opened up a great opportunity; or so was thought. It showed the Nov 9, $580 calls selling for $0.03! Immediately 10 contracts were bought. The trade happened with less than 2 minutes remaining in the trading day. Major profits were on the way. But why were the options so cheap? The answer came on Sunday.

Doing research on Sunday revealed the truth. As the Optionsxpress account details page was opened, the Apple options were not in the positions section of the page. Where did they go? The quick answer is that they had expired. The options that were bought expired on November 2nd, not November 9th, as previously thought.  Yes, you read correctly. Out of the money options were bought and expired within 2 minutes. The silver lining in this is that capital used for the trade did not surpass limits. At least something worked in the trade!

Here is the take away. Take your time to review your trade. Optionsxpress even has a preview trade before execution of the trade. It was completely ignored due to the time restriction. MISTAKE, MISTAKE, MISTAKE.

Not Purchasing All At Once

Sometimes your research allows you to take on a position that contains many units (shares or options contracts). One thing that needs to be kept in mind is not going in 100% all at once. You should schedule your buys throughout the trade. Major risk abounds by going all in. Capital protection and trade verification need to be achieved.

When purchasing many options contracts or many shares of a stock or etf, an investor or trader feels confident that the expected move will happen. But if that trade is wrong, the losses can increase quickly. One protection against that action is to plan a purchase program in stages. Determining how much to buy when is up to the investor. But going all in right away risks capital that should not be risked. Sometimes sacrificing a little bit of profit in order to protect capital is essential and should be used when possible.

Investors and traders tend to have their egos show up while trading. Let's face the fact that making money is the purpose and feels good. But sometimes we are wrong. The trade sometimes goes exactly the other way the moment we enter. A key to winning trading is to wait for the verification before the bulk purchase. Allowing for verification before the bulk purchase has saved many a traders' capital. This strategy also allows for more trades to be executed because of the fact that losses taken when we are wrong are much smaller than if we go all in.

So remember to use a proper purchase plan when making a decision to purchase lots of stock or many options contracts. Hopefully it will not only save your capital, but extend your profitable trading career.

USO Trade Still Open; Status Code Orange

The USO November $34.00 put trade is still open. The status of the trade is Code Orange. The put closed the week at $1.50. That is a drop of $0.30 since the trade was started. The USO ETF closed the week at $34.12. That is a rise of $0.26 since the trade started.

Previous trades include USO, IAU, PIN and FXC options. 

If a more conservative approach is more to your trading style, Trading Futures ETF Options also follows Sell The Call, a blog covering all things covered call. 

**Disclaimer** - This is just trade and or futures options information. It is not a recommendation to buy or sell any of the securities mentioned in this blog. Do your Due Diligence before any trading or investing. 

Indian ETF PIN Option Trade Closed Code Yellow

Today, the trade in the December $18.00 call options is over. The trade ended Code Yellow. The Options were sold for $1.25. PIN is trading at $18.70. Some of the reasons for the trade are:

- There are political and economic matters that has created uncertainty over the trade. Some of the matters were not known before the trade was made, which is

- There was a lack of confidence in the the trade due to this uncertainty.

- The fast run up of PIN

- Selling at a small profit is a bonus for this trade given the uncertainty.

Previous trades include USO, IAU, and FXC options.

If a more conservative approach is more to your trading style, Trading Futures ETF Options also follows Sell The Call, a blog covering all things covered call. 

**Disclaimer** - This is just trade information. It is not a recommendation to buy or sell any of the securities mentioned in this blog. Do your Due Diligence before any trading or investing. 

IAU Option Trade Ends Code Yellow

The IAU option trade has ended. The October $16.00 call options were sold for $0.90 before commissions and fees. IAU was trading at $16.82. The status of the trade was Code Yellow.

Some reasons for the sale include:

- The move up was very quick

- The move up in the ETF reached its target price. Technical analysis shows there might be some resistance at this point.

- Speculative time value in the option has dropped below $0.10.

If a more conservative approach is more to your trading style, Trading Futures ETF Options also follows Sell The Call, a blog covering all things covered call. Previous trades include USO options.

**Disclaimer** - This is just trade information. It is not a recommendation to buy or sell any of the securities mentioned in this blog. Do your Due Diligence before any trading or investing.

USO trade finished Code Yellow

The USO trade has ended. The October $35.00 call option was sold for $2.43 before commissions and fees. The price of the USO ETF was at $36.37. The trade ended Code Yellow.

Some reasons for the sale:

- Decrease on the time value of the option was moving quicker than increase of intrinsic value of option.

- Brent has reached above $97.00

**Disclaimer** - This is just trade information. It is not a recommendation to buy or sell any of the securities mentioned in this blog. Do your Due Diligence before any trading or investing.

Current Status of USO trade Code Yellow

The USO trade is still currently on. The status of the trade is Code Yellow. USO closed the week at $35.95. That is a rise of $1.12 for the week. The October $35.00 call bid price closed the week at $2.29. That is a rise of $0.61 for the week.


 **Disclaimer** - This is just trade information. It is not a recommendation to buy or sell any of the above securities. Do your Due Diligence before any trading or investing.

Welcome to Trading Futures Options

This blog has been created to follow a futures options trading account. ETF options will also be used when necessary to execute a trade.