Tackle Today: The Options Heuristics Series – Profiting with options as a buyer
November 6, 2018
≈ Keep it in your pocket. ≈
We’ve seen some questions in the Clubhouse regarding how to profit with options. Because they are multidimensional beings, and also because there are many possible strategies out there, new students find it hard to pinpoint exactly how profits are made.
When you enter an options trade, you are either a buyer or a seller. Even in more complex strategies involving, say, four options contracts, if you incur in a *net debit* to enter the position, you are a buyer (you are in a long position). On the other hand, if you incur in a *net credit*, you are a seller (you are in a short position).
So how do options buyers profit?
Profiting with options as a buyer: To profit as an options buyer, you must buy low and sell high.
This is as simple as it gets. It doesn’t matter if you are buying a single call, a single put or entering a Debit Condor. If you enter the position with a net debit of $1, for example, the only way to exit this position with a profit is if you sell the contract back for more than $1.
You can download and print the flashcard HERE.
Chart of the Day
Profiting with options as a buyer
Video of the Day
Why You Should Measure Twice Cut Once (Trading Psychology)
Coach Noah goes over the importance of paying attention to details and being cautious when placing and managing your trades.
Today’s Lineup
Tackle Archives
New Trader Action Plan
This action plan is meant as an introduction to both Tackle Trading and trading itself. You won’t learn about options or strike prices in this guide. Rather, this plan focuses on helping lay a foundation for the mentality of trading, including finding your why of trading, the discipline it requires, and the like. Let’s begin!
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.
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 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.
