Option Millionaires

[leemalone2k3]

I actually learned all this before I started trading options. Spent about a year, 8-9 hours a day studying the various advanced trading techniques the floor traders use.

My spread trades are usually executed as follows.

In almost all case I buy a long position first- if it goes my way, I take the profit. If it doesn't then I take a short position and try to cover the cost of the long position at the least by buying it back cheaper. This short position has defined risk because of long positions. I like holding the long position and scalping the short position. I will not leave myself in a naked call trade because the risk is too high. I will sell naked puts only if I am willing and able to buy the stock.

I especially like this technique on expiration because premium melts so fast the last couple of hours.

Hopefully at some point we will all be using these techniques. Takes a little while to learn the dynamics of them and the proper time to use the different types of spreads, but once you learn them your option trading enters a new level of income generation.