21 min listen
71: The 2 Major Misconceptions About Exiting Option Trades Early
71: The 2 Major Misconceptions About Exiting Option Trades Early
ratings:
Length:
22 minutes
Released:
Nov 21, 2016
Format:
Podcast episode
Description
Show notes: http://optionalpha.com/show71 For years now I've talked about the concept of exiting option trades early and taking money off the table as a way to both improve your win rates and increase overall profitability. Still, I'll often get emails and questions about the legitimacy of exiting trades early vs. letting profitable trades go all the way to expiration and "milking it for all its worth" as some members have put it. Honestly, I can't blame anyone for questioning it because on paper it sounds crazy. Close a trade early for half the potential profit, and you'll make more money - who would believe that right? Today, we'll present another case study that proves why the two biggest misconceptions about exiting trades early are completely wrong. Not only will you see why taking profits before expiration increases your win rate but you'll also hear how it helps reduce the magnitude of drawdowns and increase your average profit per trade. Once you see the results of these four backtested short strangles in TLT, a major bond ETF, I'm confident you'll quickly change your opinion and start implementing some of the automatic profit targets we suggest in your own portfolio.
Released:
Nov 21, 2016
Format:
Podcast episode
Titles in the series (100)
OAP 006 : If Every New Trader Did This 1 Thing They'd Make More Money: In this session of The Option Alpha Podcast I'll show you with real data why if every new trader was doing this 1 thing different they'd make more money. Plus I'll relate this to how why casinos have table limits because they know that limiting how... by The Option Alpha Podcast