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

Alright! Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. I think today’s call is going to be a little different for some of you guys because I’m going to go on a little bit of a rant here on stuff. But I say this in all honesty because it’s made a difference to me and I don’t know if I’ve mentioned this before. I think I’ve maybe mentioned this person before in other podcast or other videos before, but you probably hear me referencing him a lot because he had a big influence on my life early on and was probably… Initially, I really hated this guy. I mean, seriously. I’ll tell you who he is here in a second, but I really didn’t like him. The reason I didn’t like him was because he challenged me and that’s tough. I initially got introduced to this guy who was my coach and I’ll just say his name was Coach Anderson. If you’re listening out there, Coach Anderson which I doubt you are listening to an options trading podcast, but hey, listen, shoot me an email and let’s connect. But

Hey guys. Welcome back to the daily call here at Option Alpha. Today, we’re going to talk about how to pick which ETFs to invest in. I’ve mentioned before and often do mention that I like trading mostly ETFs versus stocks. It’s just something I’ve fallen into. I know a lot of guys and girls trade some stock and we won’t shy away from it. In fact, we’re in some stock trades right now. But most of what we do is in ETFs and people always ask how do we do this, which ETFs do we choose. The simple answer to this is we choose the highest implied volatility ETFs first. If we’re looking at our shortlist… You can use our watch list software. You just go to optionalpha.com/toolbox and you can check out our software. It’s like a one-time cost lifetime access for that. When we check out our watch list, we look and sort buy highest implied volatility first and then we filter for only ETFs. That’s the best way right now that we have to figure out which ETFs we want to be in. We just work down that list. Highest implied vol

Hey everyone, Kirk here again. On today’s daily call, we’re going to answer the question, “Should your trading strategy change with implied volatility?” The quick answer to this is no, your overall strategy should not change, meaning the game plan should generally be the same. Sell options, collect income, keep your position size small, make lots of trades. But the tactics in which you go about it should change. It should adjust and move based upon where you are on the field. To go back to any general sports analogy, your strategy might change if you’re down by 10 points or up by 20 points. The game plan is still the same. You want to win the game, but the tactics might change if you are on the two yard line, about the store or if you’re on the 50 yard line at the middle of the field. The tactics might change. Strategy is still the same. You still want to score. You still want to win. That’s the thought process that I have when it comes to this and how I think about it. To use some more concrete examples of t

Hey everyone, Kirk here again and welcome back to the daily call. On today’s call, we’re going to answer the question, “Can you just trade options and never stocks?” The simple answer to this is yes. I do believe that you can (moving forward) just trade options and never stocks. The only reason I say that is because options have the ability to give you a synthetic or equivalent stock position without all the capital that’s required to do it. You might hear some clicking in the background, but as I’m doing this right now, I just want to prove the point or give you guys an example of what I’m talking about. To use the broad-based markets which is the S&P, the ticker symbol is SPY, if we wanted to buy stock in the SPY, we could buy it for $245 right now. I’m just rounding up just so that we have some kind of round numbers to work with. That would be actual capital out of your account (if you bought 100 shares of SPY) of $24,500, so $245, 100 shares, $24,500. That’s a lot of money out of your account. In fact

Alright! Hey everyone. It’s Kirk, here again at Option Alpha and welcome back to the daily call. In today’s call, we’re going to talk about how often you should review your options portfolio. This is I wouldn’t say near and dear to my heart, but I often get people who practically don’t even review their portfolio at all, just make trades and then just assume it blindly is going to work out. But I think you should review your portfolio at least on a weekly basis. This is why I say this because I understand that life gets in the way and for me too. I’ve got two girls and my wife is at home too, so I don’t even get that much time to do these podcasts and these audio recordings as it is now, plus everything else that I don’t have time every day to do an in-depth review of my portfolio. But I believe that at least weekly, you should be doing it. For me, this is where actually the weekly strategy calls with elite members was bred out of or was born out of. What I used to do is Sunday nights, I would sit down and re

Hey everyone, Kirk here again and welcome back to the daily call. On today’s call, we’re going to talk about VXX and VIX options and how you should trade them. I’ll make this short and say we’ve done a podcast before on volatility options in these two, so if you want to understand the entire process and procedure for how they’re priced and how they work, you can definitely check out those other podcast. Head on over to optionalpha.com/podcast and just search in there. But the whole idea with these two is that they both are volatility type products that have options on them. It’s a pure way to trade volatility, most notably in the S&P 500. The VIX really tracks S&P 500 volatility. It’s a broad-based, broad market, a way to trade or play volatility. The best way in our opinion to trade VXX and VIX is to trade them bearish or to trade them once they’ve had a spike higher. What we typically would do just to lay out an easy framework or a process you can follow is that if implied volatility on the VIX spik

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 why we should balance and Beta-weight our portfolio to the S&P. I use the S&P or particularly, SPY which is the small S&P 500 ETF or I say it’s small, but it’s not as big as the SPX. But I use the markets as a benchmark for what I do with my portfolio because I feel like having one guidepost to work off of is much more efficient and offers a lot clearer of discretion when you’re actually getting into new trades or adjusting existing trades. Here’s what I’m talking about. Most people, what they do when they start going into options trading is they worry about every single trade like it’s an independent piece, like this trade then that trade then that trade. While it’s important that you worry about every single trade, what’s more important is the overall portfolio. For me, I don’t care if I lose on trades 1 to 5 if I make money on 2, 4, 6, 7, 8, 9, 10. It doesn’t matter to m

Hey everyone and welcome back. On today’s daily call, we’re going to talk about the difference between blueprints and checklist. This is one that I like talking about because I think conceptually, it’s a really good thought process for how you should approach trading because ultimately, everyone is looking for step by step and there are certain things you can do step by step in trading, but many things in trading is not step by step. Where we often see this actually is with people who come to us at Option Alpha and are members and have some sort of like military background because that’s how they were just trained. It’s not right or wrong. It’s just that they have military type background and in most cases, it’s like things are done by a checklist. In fact, one of the podcast you can listen to, I think it was like Show 107 that we did with a forum member, MACDDaddy, he even says the reason he does a lot of things in a checklist format is because that’s what he did in the military when he flew planes. He had a

Hey and welcome back to the daily call. On today’s call today, we’re going to talk about the difference between confidence and arrogance and especially when it relates to people in the market, investing people in the market, talking heads on the news. Honestly, anybody that you ran into. I ran into this myself just the other day where I was talking to somebody about investing in the markets and this difference really brought up something to me that I think is important to use because I think you could use it for anything, whether you think you’re maybe not arrogant, but maybe you are. Maybe you have some arrogance to you and that’s okay. We all maybe do have that for sure. But you want to try to be more confident in what you do and use a different approach. I’ll say this first about this difference and why it drives me crazy. When I’m talking to somebody or I’m having a discussion with somebody, immediately, I will know that I have won the discussion or the argument that they either think they’re participatin

Hey everyone, welcome back. On today’s daily call, we’re going to talk about how long should you learn before trading options or I guess really, how long should you prepare, study, do any paper trading, any of that type of stuff before you really start getting into options trading. I think this is obviously a little bit subjective to how you learn. Some people just generally first (to start off) learn very quickly. They grasp concepts very easily. They can hear things one or two times and totally understand it and it’s cemented in their brain. Then other people obviously, you just need a little bit more time and that’s just a different way of learning. Here’s my suggestion though. My suggestion is if you’ve never traded options before, have no clue, I definitely suggest you spend a good couple of weeks or months depending on how quickly you learn just trying to understand the terminology and hear the framework and hear people talk about it, see people making trades, just trying to get your feet wet in the eco

Hey everyone and welcome back. On today’s daily call, I want to talk about why I never want to be the best options trader. That might be kind of a weird topic or headline and maybe you’ve seen this and you clicked on it or you’re watching and subscribed on iTunes or Google Play or whatever, you thought to yourself like, “What in the world is Kirk going to talk about here?” But I think this concept is really important because what I often find is that people do want to be the best at what they do and no doubt, do I. I want to be very, very, very good at what I do and I want to be good at options trading, I want to be a great father, I want to be a great husband or I want to be the best at everything I do, but I never want to be number one. I’ll tell you this, for the only reason is that I actually strive to try to beat somebody else and it’s just my own thing. I don’t know if you have this or not. But if I feel like I’m number one in something, then I feel like I would quit and I would say that I’ve reached my

Hey everyone, welcome back. In today's call, we're going to talk about what happens to a stock that expires between strike prices. This is a fairly common fear I guess that people have of trading spreads, whether it’s a credit spread or an iron condor that the stock may potentially finish or end the expiration month in between two different strike prices. To set the stage here and use an example, so we can visually think about this, obviously we’ve got videos on this topic on the website, so if you want to watch a video, but if you visually think about it, it’s not too bad either just in your mind. Let’s say that we’re trading something bullish and we are selling a 48 put option and buying a 46 put option. Let’s say the stock is trading at $50, so we sell the 48 put option, buy the 46 put option. It’s a very simple put credit spread trade. A bullish put spread is really what that's called. Our fear now is that the stock falls below our short strike of $48 and closes above the $46 put option that we bought. Th

Hey everyone, Kirk here again at Option Alpha. In today's daily call, I want to talk about the best option strategies for new traders. I think there's a couple of strategies that you can really focus on if you're brand new or if you're fairly new to getting started in options trading. I think the first general theme behind the best strategies I think is all risk-defined. As you’re starting out, you don’t want to do anything undefined risk. What that means is you don’t want to do anything naked option selling. Even naked option buying is really a bad idea. Even though it’s not like a naked position, but you’re just single leg buying options or selling options, probably not the best thing you should do. I definitely suggest you should go with more of the spread type strategy where you’re buying one and selling the other. The reason is because you can control your risk a little bit more. It is risk-defined, it is profit-defined, but you know exactly what you’re getting for those positions. When you actually plac

Alright! You know, the other day in episode #5, we talked about stock picking, we looked at that AAL call that we had where we were trading it bullish. I have to tell you, just thinking about this over the last day or so, I think the realization that I've come to, maybe I came to it a while ago, but I've just thought about a metaphor that helps out with this and maybe explain the topic a little bit better, is this concept that you really haven't become a real trader until you've gone through a string of losing trades. I think people get that really, really mixed up. You see this all the time. I think you see this honestly all the time in business or in whatever, you have people or teams or companies that seem to be on the up and up. They really never had taken a punch to the face basically is what it is. They’ve never had to step back. Until you go through a couple of those scenarios or situations where you have trades that go against you or you have even a string of losing trades, I think it’s incredibly har

Really quickly today… I know I'm whispering because I'm up very early and my kids are still sleeping and it's like 4:30 in the morning here. But I was listening last night to somebody on the news talk about… My wife watches the regular news during the evening and they had somebody on talking about the markets and the fact that stocks were pulling back and this person said, "Oh well, you know this market needs a healthy pullback of 5% or 10%." I'm thinking to myself like, "What the heck is a healthy pullback?" If a market is strong and if the market is strong, it shouldn't pullback. We should have ebbs and flows every day, a little bit of buying, a little bit of selling here. Of course, that's healthy. We don't want everyone just buying up everything. But in a healthy market, there's no such thing as a healthy pullback. I'm just totally baffled by that comment and don't think that it's actually realistic. I don't think that if markets are healthy, they just randomly pullback 10%. 10% is a pretty significant dr

Alright, I think this is going to be a really fun topic to talk about, but the question is really here for this show – Does stock picking work? Let me set the stage here and tell you a quick story of actually what just happened literally like today and why I think this is so important. We recently just sent out an alert to our members to buy or go long basically AAL stock which is American Airlines. We thought just looking at the charts and we got some technical signals that it was going to turn around, so we bought a call debit spread on AAL when the stock closed yesterday around $43. It closed just above $43 and change, we ended up buying the 42 calls, sold the 44 calls, so did this call debit spread right around where the stock was trading anticipating in the next 58 days because we did it out a couple of months that the stock would actually make a reversal or a turnaround or maybe stop declining and rally up. Well today, the stock is up 5.43%. I only say this to say that I’m totally stupid and there is no

Hey guys. Welcome back to the daily call. This question came in from somebody who submitted a question online after we just got started and launched this podcast. Very cool that you guys did that. If you have questions or topics you want me to cover, head on over to optionalpha.com/ask and that’s the best way to leave me a message. But the question was, “Kirk, it looks like you prefer ETFs versus stocks.” The big question here is should you trade ETFs or stocks. I would be totally open in saying yes, I prefer ETFs over stocks given the choice. Given the choice, meaning if we’ve got a market that all has implied volatility that’s high or all has low implied volatility and nothing is really discernibly better or worse than the other, then yeah, of course I’d prefer ETFs over stocks. The tradeoff that you make in doing this is that with ETFs, we know that they’re going to be less volatile, so does the market, so does everyone else. Option premiums on ETFs might be a little bit lower than option premiums on a sto

In yesterday's daily call, we talked about risking everything to be successful and I want to follow up on that today because I also want to tell you that you shouldn't burn yourself out by trying to learn everything at once. There's being very, very aggressive in getting this hustle mentality that you probably see all over the place, but there's also being strategic and smart about how you learn. One of the things that we've done at Option Alpha and this is bred into or built into our courses is that we take everything in stages or chunks and there's lots of trading modules and courses, there's a couple of different tracks that you can go through because I don't want you to go through 72 videos at one time or in a couple of days and just brain-dump all of this information. Don't burn yourself out on learning everything at once. What I suggest you do if you want to be successful in doing anything (This is what I found personally, so I don't know what other people say. This is what I found personally) is you ho

In this first pilot episode here for the daily call, I want to talk about this concept of risking everything now to be successful. It doesn’t matter if you want to trade options or you can honestly replace options trading with – I want to be successful doing X, whatever it is, in your job, in your relationship, your family, career or business. It doesn’t really matter. But I don’t think enough people have this concept of risking everything now, so that they have no regrets later on because what I don’t want in my life more than probably anybody I know is I don’t want to have the regret of – “Man, I wish I would’ve done this.” or “I wish I would’ve really taken the time and the effort or the energy, the money I’ve invested in this thing.” Whatever it is, it doesn’t matter. I’m saying you can use options trading, you can use whatever. But not enough people risk everything now to be successful later on. I think you have to really think about that as you continue to move forward. Investment doesn’t always mean mo

Alright! Hey there again. It’s Kirk and welcome to the very first episode here of the daily call from Option Alpha. I’m super excited to start doing this podcast. This is literally the first recording that I’m doing here, so what I want to do is set the stage and the foundation here for why we’re doing the show, why it’s this new podcast, what’s happening to the old which nothing is happening to the old podcast, but what the format is going to be, the topics that we’re going to cover in this thing and generally, just the roadmap of where I see this thing going and my goals for it moving forward in the future. I hope that everyone listens to this episode. If you have listened to any other episodes after this because we’re going to be releasing this podcast with a bunch of other episodes and obviously we’ll be doing them every single day, then maybe you come back and you listen to this and just understand how the episodes are structured and why some might be different than others. In this show like I said, I ju