The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. On today's daily call, I want to talk about a really hot topic which is dividend assignment risk for short call options. This is a topic that we have videos and training on, but again, I wanted to get another avenue of teaching this out, so that people understood how to effectively navigate this scenario because I think it freaks a lot of people out. What usually happens is the brokers would send you a notice or an alert that says, “Hey. You have a short call option that’s at risk of assignment.” People basically throw their hands up and say, “What the heck is going on?” I usually get these emails which is maybe why you’re even getting this podcast link or maybe I sent you a link to this podcast because what people do is they throw their hands up and they’re like, “What the heck is going on? I’m going to be assigned. I don’t have the capital to handle it.” Here’s what happens and I want to walk through this process, so you under

Hey everyone, welcome back here. It’s Kirk here again at Option Alpha and in today's daily call, I want to talk about being bullish, bearish or neutral and answering the question, “Does it really matter for traders?” I’ll answer this question in two parts which is yes and no. You’re probably thinking to yourself, “Well, Kirk, that really doesn’t help.” But let me explain why I answered yes and no to the question, “Does it really matter?” Ultimately, I believe that it does not matter what direction you trade the market. When it comes to options trading, it doesn't matter what direction you trade the market because you can build an option strategy with the same probability of success and the same general risk parameters in any direction. Let me explain. If you are bullish on a stock, you can sell a put credit spread with a 70% chance of success and now, you are bullish on that underlying stock. If you're bearish on that stock, somebody else could come in and sell a call credit spread and be bearish on that stoc

Hey everyone, welcome back. This is Kirk here again at Option Alpha. Today, I want to talk about on the daily call, the simple difference between American-style and European-style options contracts. It’s a very subtle difference, but like I said in the title of this show today, a very simple difference between these two styles of contracts. Now, most people will end up trading… If you trade options, most of you or the vast majority of the trading that you do will be on an American-style option contract and very few of you… Or if you even do most trading even as you start to scale, very few of the contracts that are out there are what’s called European-style option contracts. Now, the difference between the two really comes down to exercise at assignment, when an option contract can be exercised or assigned. American-style options which again is the vast majority of most ETFs, most stocks… Vast majority of contracts are what’s called American-style. Those contracts can be exercised or assigned any time up unti

Hey everyone, Kirk here again and welcome back to the daily call. On today's show, I want to answer the question, “How many shares or option contracts should you trade first?” I think this is a common question. It’s probably a very simple beginner question that we get often which is like basically, “How big of a position size should I make on my first couple of trades?” I think in either case, whether you're starting out or whether you’ve been doing it for awhile, I think all of your trades should generally be small. When you’re first starting out, when you’re really getting your feet wet, trying to understand options trading or stock trading, I think your first couple of trades should be one share or one option contract, literally one contract. Now yes, that means that in some cases, it might not be as advantageous for commissions because maybe your broker deliberately has a commission structure set up, so that you trade more contracts which is a cheaper commission, but don't get sucked into that initially,

Hey everyone, welcome back. This is Kirk here again at Option Alpha and on today’s daily call, I want to answer the question, “Can I still be assigned stock even after I close my option trade?” Look. This is going to be a quick one today because the short answer to this is no. Once you close your option position, there is no risk of assignment in that contract because frankly, you don't have the contract. I wanted to answer this question because it came in and it made me realize there’s still some nuances out there that I think people aren’t clear on and I think it comes down to honestly just over-thinking things, so just not thinking through the process, assuming that there's always still this lingering risk. But again, everything is actually pretty black and white when it comes to options trading in the sense of contracts, expiration, closings, etcetera. In today’s example, obviously, if you let’s say sold an option contract and you collected a premium which is what we typically do as option sellers at Opti

Hey everyone, Kirk here again. Welcome back to the daily call. Today, I want to take one step back as we’re getting started in January and again, just let you guys know a little bit more inside into Option Alpha and in particular, I want to tell you why built Option Alpha to serve this one type of investor. I say “type of investor” because I truly think it’s one type of personality that honestly we all share. If you’re listening to this podcast, I 100% believe that we all share this one characteristic or trait amongst all of us. No matter where we live and what we do and what age we are in, I think we all share one thing and we built Option Alpha, I’m continuing to build Option Alpha to serve just this one type of person. I say this in all honesty because I don't want to serve everybody. If I serve everybody or if I built Option Alpha to serve every type of investor, I’d ultimately end up serving nobody. This is why sometimes although we take recommendations, I tell people oftentimes, “There’s things that we

Hey everyone, Kirk here again from Option Alpha and welcome back to the daily call. Today, I want to talk about why money doesn't come from effort or hustle. I think that we are in this huge market period or I don’t know, just like social media period where everything you see… It just drives me banana sandwich sometimes when I open up Facebook or Twitter or Instagram and browse and I see all of these people hustle, hustle, hustle, it’s like #hustle everywhere and I’m thinking to myself, “Yeah. There’s a time and place to work hard. No doubt. I’m not discounting the value of hard work. But I think people don't associate or shouldn’t associate money coming from effort or hustle.” There’s a comfortability in working long hours and I think that’s where it comes from. People think, “If I work long hours, I will generate more money, so therefore, long hours equals more money.” But it’s not the point. The point is that you have seasons of hard work that come and go. I even go through this here personally. I have sea

Hey everyone, Kirk here again and welcome back to the daily call. Today, I want to talk about stock market forecast and just really try to find out if they’re legit or bogus. I think that especially as we get started with 2018 and we’re just even still in the first couple of weeks here, a lot of articles that have been coming across my desk, whether people are tweeting at me or sending me messages or all these expectations of where the market is going to go and it’s ironic and funny and I see this on my end more so than maybe you guys see this on your end. But I get everyone's opinions and that's good for me because I realize everybody has different opinions. I don't see any consistency in everyone's opinions, meaning I get articles that are sent to me or news stories, whatever that the market is going to blow up another 20% and go up another 20% this year and then I get literally the same five minutes… I think the two emails that I’m looking at right now, one’s a message, one’s a tweet that somebody sent me.

Hey everyone, Kirk here again from Option Alpha and welcome back to the daily call. Today, we are going to answer the question – “Can we roll inverted strangles from one month to the next?” The simple answer to this question is – Yes. Of course, you can roll your inverted strangles from one month to the next or one expiration period to the next. The question now is going to become – “Can you roll them for a credit?” Meaning you don't want to pay to roll the position. Here's how I would generally set it up and just walking through how I would think about it as we roll positions. We’ve done this before in the past, so it’s not something that we haven’t done. We’ve done it a bunch of times and it generally works out pretty well when you extend your trade and give yourself more time. Let’s say we have a position. For whatever reason, we got inverted on the position, meaning our calls are below our put strikes. We go inverted. Let’s say we’re inverted by $2, so a very small inversion. Sometimes we can get inverted

Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. On today’s daily call, I want to answer the question quickly – “How exactly do you calculate profit targets?” I think although it seems intuitive for most of us, it might actually be something that you just want to double check as you’re going through your trades and just make sure that you understand how exactly you calculate these profit targets. Now, why do we talk about profit targets? Well, we understand that the concept of taking trades off early really helps us out in our long-term returns and win rates. It helps us out in reducing drawdowns, just this idea of managing positions or removing positions earlier in the expiration cycle. Now, I would say that each profit target level may depend on the exact time that you enter the trade, the strategy, where implied volatility is, all this stuff. There’s no one size fits all, meaning that there’s not always going to be say a 25% profit target for everything. It really depends o

Hey everyone, Kirk here again and welcome back to the daily call. Today, we are going to talk about trading options with technical analysis. This is probably a huge topic that a lot of people have questions about and in fact, I think technical analysis is a great engagement tool for getting people interested in the markets. In fact, I think it’s probably one of the best things that got me engaged in the markets early on, is really trying to understand technicals. We naturally I think as humans and most of the time, investors, we try to derive some sort of meaning from something that more or less is meaningless. I mean, the markets are what they are. We can’t change them. We can’t direct them as much as we try to maybe impart some sort of like Jedi mind trick on the market. We’ve all been there. Like “Come on! Please stock. Move higher. Move lower.” But we know it’s never going to happen although we try. But we’ve always found or we've always been interested in just as humans, in understanding things that are

Hey everyone, Kirk here again and welcome back to the daily call. Today, I want to answer the question – “Do parents of kids actually make batter options traders?” Although this may be a little bit of a controversial topic… And if you don't have kids yet, you won’t understand where I’m coming from, but I think you'll appreciate just the concept that I want to try to give to you guys today and maybe make you think a little bit differently about options trading. But here’s the deal. Look. I really believe that options trading is like having kids. I think it's very similar to having kids or at least you should treat it like you're having a kid. The reason is because most people get started in options trading and they whimsically go into it. What I mean by this is that they commit to trading options, but then they really don't commit to actually doing the activities and starting this like a business. They want to make a full-time income. They want to re-ball the benefits of options trading, but you really don't a

Hey everyone, welcome back to the daily call. Today, I want to talk about the difference or at least how I think about investing in real estate versus the stock market. Again, the purpose of this is not to talk about all the benefits of investing in real estate versus trading or trading options in the market. I think I’m just generally going to talk about how I see both of these things in my life and how me and my wife have used both the stock market and real estate, how we piggyback one off of another and try to build out just a big framework for financial wealth and freedom. That’s really the goal of doing all of this obviously. Most of our money just so you know and most of our wealth is in what we do in options trading. Options trading is the fuel that drives all the different engines, I guess and in how I think about things. It is the lead of the train, so everything else follows behind it. What I’ve decided to do and what we decided to do many years ago now is we decided to start pulling money at some p

Hey everyone and welcome back. This is Kirk here again from optionalpha.com. On today’s daily call, I want to talk about all the different economic data and indicators that are out there. In fact, not all of them, but I want to highlight some of them, maybe the top seven to eight or so that I think you should at least track or know about and be aware of during the month. Obviously, every single day, there's a lot of data that comes out about the economy, different sectors, different market reports come out and it can be overwhelming at some points, trying to understand exactly what’s going on, who's doing what, what sectors of the market are moving or not moving, contracting or expanding. And so, my goal in doing this podcast is just to maybe highlight some of the ones that you should be aware of. Now, I will be totally honest in saying that I don’t think you should necessarily track and chart and read every single report, but you should at least be aware of things when they come out. The way that I think abo

Hey everyone, Kirk here again and welcome back to the daily call. Today, we are going to answer a big question that I get often which is – “Do you have to work in finance to trade options or stocks for a living?” The simple answer to this is absolutely, emphatically 110% no. You don't have to work in finance. You don’t have to have a finance background by any stretch to learn how to trade options successfully or learn how to trade stocks. In fact, to just even prove this point a little bit further, when I first got hired to work in New York for Deutsche Bank in their Mergers and Acquisitions Department, we were all brought in… Everyone who was hired basically for Deutsche Bank was brought into a huge room because there’s a lot of hires in New York at that time and everyone was brought into a huge room and they basically had us put our hands up based on degrees. They said, “Hey. How many people are finance degrees?” I do have a finance degree, so I put my hand up and I said, “I have a finance degree.” And then

Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. On today’s call, we’re going to talk about how using options trading software affects your decisions, good or bad. Look. Ultimately, I think that software is a huge tool and asset. That’s why frankly, we’ve spent hundreds of thousands of dollars here at Option Alpha to buy loads of data and data streams and build software and tools for you guys because I think ultimately, it helps all of us. I say this actually selfishly. I build software for myself too and I know that it helps out for everyone else. But look. Software absolutely helps streamline the process. It helps us make better decisions more quickly than we could if we didn’t have software otherwise. Now, software can also be very clunky, so that's always the trade-off, is – What do you include? What do you take out? What we try to do here at Option Alpha is we try to include the things that really, really steer the ship in a different direction, so the critically importan

Hey everyone, Kirk here again and welcome back to the daily call. Today, we are going to talk about the benefits of failing for investors. I think this is going to be actually a pretty interesting episode hopefully for you. But I want to actually highlight the benefits today of failing particularly for investors in the options trading space or we can just call it “in the stock market investing arena.” But here’s the deal. I think about this oftentimes with trading and investing. I think about it oftentimes with real estate or even the website, running the website. There’s going to come a time where you’re going to just basically fall flat on your face and that’s not necessarily a bad thing. I think the people who are the most successful in life generally were going to learn from that experience and get back up. But what it comes down to for me is at the end of the day… When I mean “the end of the day,” I don’t mean the end of today when you’re listening to this podcast. I mean years and years from now, lookin

Hey everyone, Kirk here again and welcome back to the daily call. Today, we are going to answer the question – “Where to start trading options?” If you’re listening to this and if you’re new to options trading, hopefully we can point you in the right directions. We obviously can’t cover everything there is to know about options trading in 10 minutes or less, but hopefully we can start you in the right direction and give you some conceptual frameworks for how to learn options trading, how to go about learning anything really and it's all about digging into different topic areas. The first thing is obviously, people will start asking – “Where can I go for options education? Are there any books I can read, paper trading, brokers, etcetera?” I always say you should start with education. Learn first what you're getting yourself involved to in before you actually start opening up an account and start trading real money. And so, you can take a course on a place like Option Alpha. There’s also free courses out there

Hey everyone, Kirk here again and welcome back to the daily call. On today’s call, I wanted to talk about why only 10% of options traders are actually successful and why I think 90% fail. I’ll start this out by saying that they don’t know where. These stats are just honestly pulled out of thin air because we hear all the time that people say 90% of traders fail. I don’t know what the actual numbers are. I don’t anybody has actually really tracked. I don’t think you can even track what the actual stock numbers are. But it’s probably safe to assume most businesses, most ventures that 90% or at least 90% of people actually fail trading options. I wanted to cover what I think… I just sat down this morning with my coffee and thought probably about six things or so that I think really are the main culprits if you will about why people fail trading and really don't find success, so I want to cover these with you guys here today. I think number one is just consistency. I think it has to be said that the biggest reaso

Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. In today's daily call, episode number 101, we are going to talk about my glacier business model for Option Alpha. I know that sounds kind of weird because you’re like, “What the heck does a glacier have to do with Option Alpha?” But I’m sure I’ll explain this and hopefully I do well explaining it as we wrap up the 2017 year and get into 2018 which for me is a big year because it really is I guess the 10 year or becoming the 10 year anniversary of starting this whole journey online and doing trading in general. I actually started doing trading back in 2007, but really started to publish a lot more content in 2008. That was the year I guess that I first started to publish a lot more of what I did and started writing tutorials and articles about it. And so now, as long as it actually seems, it seems much longer than that, but it’s been 10 years that we’ve been doing this online which is crazy and much longer than most people and/or