≈ Keep it in your pocket. ≈
Moving on with The Options Heuristics Series. Today, we’ll be presenting the second Absolute Truth.
Absolute Truth n.2: If you buy an option contract to open a position, you must sell it back to close it. If you sell an option contract to open a position, you must buy it back to close it.
Many new traders have a hard time to understand the mechanics behind opening and closing positions, especially when trading multi-legged option strategies, a situation where you simultaneously buy AND sell contracts.
These are the commonly used acronyms:
– BTO (Buy To Open) » STC (Sell To Close)
– STO (Sell To Open) » BTC (Buy To Close)
Chart of the Day
ABSOLUTE TRUTH N.2
Video of the Day
How to open an Option Chart on Thinkorswim
Coach Tim explains how to open and analyze the Options chart on Think or Swim.
Today’s Lineup
ROOKIE CORNER
Lets go hunting Part – VI
How about those markets? Were you ready for the fall? I have had numerous conversations today asking me what happened to the markets? Why are they falling? Why are the down candles so big? Is this the next crash or is it just a correction like we saw in February. The answer is no one really knows for certain. If we look at February 2nd, we see that the S&P 500 dropped very significantly and less than two weeks later it was back up towards the eventual all-time highs that we have seen recently. The issue is that we didn’t know for sure that it was going to head back up.
Coaches Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
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 4:30pm EST
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.
