Tackle Today: Simple? Yes. Easy? No.
May 28, 2019
≈ The Long Call Strategy ≈
Options trading is not a new thing. OK, the modern options trading we know is relatively new. It was introduced in 1973 when the Chicago Board of Options Exchange (CBOE) was formed, which, by the way, became the first marketplace for trading listed options. However, the concept behind options trading has been around since the ancient Greeks.
The call option contracts were the first ones to be standardized. Put Options came later, in 1977. The strategy is very simple in its essence but far from being an easy one to trade efficiently, let alone making us money over the long run (that is what we all want, in the end).
When you buy a call option—you are said to be “long a call option”—you have the right to buy the underlying asset at the strike price at the expiration date. Simple? Definitely, yes.
Then come the complications.
- Which strike?
- Which expiration date?
- Which underlying asset?
- What about earnings and other high-impact events?
- What about dividend payments?
- What about volatility?
- What about time decay?
- When to get in?
- When to get out?
- How many contracts?
I can feel your pain. But worry not. In tonight’s Coaches Show, we will be covering the Long Call strategy from the new Tackle Trading Playbook in detail. You don’t want to miss it.
Not a Pro member? I can feel your pain again. Join us here.
Chart of the Day
Long Call risk graph
The image above illustrates the Long Call strategy risk graph. Limited risk and unlimited reward. That sounds like the best strategy in the world. What can possibly go wrong?
Everything. That is why you don’t want to miss tonight’s Coaches Show. If you are still not a Pro member, join us here.
Video of the day
How to Buy a Long Call With Stop Loss
In this video, Coach Noah discusses how to speculate with stock options if you think the stock is going to rise. Call options provide a limited risk and give the purchaser of the option the right to buy the stock at a specific date. To further mitigate the risk, Coach Noah discusses ways to use a technique called the stop loss to help minimize the loss if the anticipated price movement does not occur as planned.
Today’s line up
Traders Lounge 11PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show 8:30PM EST
This is our weekly MasterMind group. Join the coaches tonight, 8:30pm EST to discuss the markets and help you prepare for the week.
Halftime Report 12:30PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
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