Hard to believe that we are in November and heading right into Thanksgiving next week. I don’t know about you but the smell of home-cooked meals and desserts with the fireplace warming up the house, football on the TV and the sounds of laughter echoing all over the house gives me such good vibes. The preparation on the other hand is what I despise. Going to the store to buy this thing and that thing only to get home and remember I forgot the other thing is such a hassle but it’s part of the whole turkey day experience.
As my focus shifts towards Thanksgiving festivities, other things start to take a back seat. Trading is one of those things. With the market being closed on Thursday followed by the 1 p.m early closing on Friday the day after, the week of Thanksgiving ends up being a slow week for trading. I typically have no desire to look at charts after the market closes on Wednesday. Before I completely check out of the market I make preparations to make sure that when I log in to my account the following week I find no surprises like a family member showing up unannounced for Thanksgiving dinner with their “new boo” and now you have to make accommodations for extra people you weren’t expecting. Lol!
There are a few guidelines I follow before I transition from charting to chopping the Wednesday before Thanksgiving and I figured I’d share them especially for anyone new to trading and those taking the day off on Friday.
- Remember the market is only open until 1 pm the Friday after Thanksgiving.
- Double, double-check for options expiring that week.
- If you do, be sure to manage any ITM options on Wednesday or Friday before 1 pm accordingly
- Check for any pending order entries that have not yet been triggered by Wednesday. Decide if you want to leave pending orders or cancel them especially if you don’t intend to trade or manage trades on Friday.
- Consider taking profit or moving stop loss on directional trades by Wednesday. Seeing gains getting wiped away when there was a chance to take profit does not bring a warm and fuzzy feeling. You’ll feel a lot better going into the long weekend knowing you’ve locked it some profit than wondering what you’ll be facing come Monday morning.
- Consider making modifications to the trades you intend to keep in play. You may have a long call on company ABC. Sell a call and turn the trade into a bull call vertical to reduce risk.
- Go through your cash flow trades and make proper adjustments as well.
- Decide if the cash flow left in the trade is worth it or not. For example, if your rule is to take profit at 50% or more of cash flow received then you’d close any trades with 50%+ in cash flow.
Now just because I chose to take a break does not mean I want to leave money on the table. As a seller of options, taking advantage of time decay is what makes selling options attractive. So why not eat up some of that theta while you are gobbling up that stuffing or pie throughout the long weekend? You could look for new entries or you could also think about rolling your existing trades to bring in additional cash flow that you’d be earning over the holiday weekend as the market is closed.
We’ve had quite the year in 2020 and despite all the challenges we’ve faced as traders, in our personal lives, our communities, or as a nation, we still have a lot to be thankful for no matter the circumstance we might find ourselves in currently. I am profoundly grateful for this amazing community we call #teamtackle! We learn from each other and support one another daily and it is incredible that people who were once strangers we now deem as family.
To learn more join me tonight at 8:30 pm est as we dive further into these concepts and talk about the many things we are grateful for. See you then!
Until next time Traders!
Emily Muiruri was born and raised in Nairobi, Kenya before her family moved to the US and settled in Maryland, Emily began her trading journey in January 2015 after 17 years of Property Management in the Self-Storage Industry. Like many new traders, Emily started off with directional trading strategies such as long calls, long puts and very little in cash flow strategies. Over time that has changed and now her core trading strategies are cash flow based such as are Covered Calls, Naked Puts, and Iron Condors. Though she is still a student learning and enhancing her trading skills, she has a strong desire to teach women to take control of their finances and become traders. Writing blogs is one of the ways she’s is looking to spread the word and get more women involved. Emily knows that with the right education and trading system women can be successful traders.
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