A really great way to learn options trading is through option trading tutorials. I found as I was learning to trade options that watching a trade get set up, entered, managed and reviewed was a great help to my learning to trade.
It has been my experience that it is helpful to watch a trade being placed in the form of a video AND I've also found it helpful to learn about trades being set up and managed by reading about it. That's why I've included both formats here on this page.
I'll occasionally put up a new video tutorial, especially on
I haven't shown before. This will offer the opportunity to discuss not
only the trade itself as it develops, but also the use of some of the
trading tools for trade analysis and trade management. Watch
the individual links to these to show up also in the right column and
accessible from every page on the site.
Additionally, I'll be setting trade tutorial pages where
choose a strategy and create a trade page. This page will act like a
trade journal so I'll have the opportunity to demonstrate this process
as well. Each new trade will have a page where the trade is set up and
discussed as I prepare to enter. I will add updates to these
pages as I monitor the trades and I'll ultimately have a trade
conclusion where I assess the result of the trade and any lessons
learned. This approach is intended to be a more formal
demonstration of the trading
journal and trade
log concepts I've discussed on other
What I'll be doing on this page is collecting all the option trading tutorials I put together. From this page, there will be a link to details of each option trading tutorial . Below is a summary of the trades in terms of the trade type, gain/loss, etc.
trades will largely be constructed from index options or ETFs of a
particular index. There are many reasons for this, some of which are
outlined on the index
page and some on the ETF
options page. The key reasons though for me has to do with
volume traded and
the fact that no trade is dependent on any one stock and any events
that could cause huge swings.
I want to point out that I've placed all these trades in an
paper trading account at thinkorswim.
am NOT making any recommendations on any of these trades.
tutorials are simply offered for educational purposes.
|1/22/2013||Put Calendar Spread (SPY)||$105||-$3||This trade didn't turn out quite as expected but the adjustment strategy helped ensure it was a small loss.|
|3/26/2013||Put Credit Spread (DIA)||$60||$60||The trade worked out exactly as expected|
|4/4/2013|| Call Credit Spread (DIA)
||$88||-$30||This trade didn't work out as planned - except
that I had a technical exit to close if I was wrong. I was and it did!
|6/27/2013||Put Credit Spread (SPY)||$72||$74||This trade went exactly as expected and we even got a bonus on the fact that the gap up gave us a better than expected fill price when the limit order triggered.|
While the point of these trade tutorials isn't necessarily to have each one turn into a winner, it's still nice to be able to track the result over time. While I've summarized the trades above, I want to provide a portfolio summary much like we would if we had a trade log. After all, it isn't really about how many winners or losers there are but what the equity curve looks like. The table below will show the cumulative result of closed trades. Note: This includes open debit orders so the balance may seem off sometimes.
|Starting Date||Starting Balance||Current Balance||Cumulative Gain/Loss||% Portfolio Gain|
As I continue to put on trades, how do I choose new strategies to trade? One way is through taking more of a portfolio management view. Check out this video to see an example of portfolio management in action.