Obey These 3 Option Trading Rules

I've decided to invite AJ Brown, from TradingTrainerHomeStudy.com, as he was a great guest blogger and hit a very hot topic...options! You can read his last article on OTM, ITM, or ATM, which was a great success. I asked him back today because options are getting much more play in this economy and he has 3 great rules for trading options that he would like to share with you today. Comments are welcome and expected, and just as before, he will be responding to ALL comments!


The most difficult part of trading options (or anything else) is controlling your emotions so you can make smart trades.

There's always this tug-of-war. On the one hand you have logic and common sense. On the other, you have fear and greed. Problem is, fear and greed are too often the winners! (I know; I've been there.)

With that in mind, here are three option trading rules I suggest you obey to eliminate emotional decisions.

Rule #1: Be an End-of-Day Trader

Do some people make money day trading? Absolutely. But for most people I advise against it. Here's why...

Watching the market real-time can send your emotions soaring and diving like a roller coaster on a rickety track. Sure, it's thrilling. Sure, you'll experience something like a gambler's high. But it ain't going to do your trading account any favors.

Continue reading "Obey These 3 Option Trading Rules"

Which options to pre-select: OTM, ITM, or ATM?

Today I'd like everyone to welcome AJ Brown from TradingTrainerHomeStudy.com. He's an options expert and his article below is a very valuable one that everyone should read! Please don't be shy and post your thoughts and opinions which options YOU prefer!


When trading options using short to medium term strategies, we're not looking to hold positions for a year, six months, or even three months. The idea is to enter and exit our trades within three to 40 days. Returns of 5% to 150% per trade are common with short to medium term strategies.

When I surveyed participants about putting together a short to medium term option trad-ing strategy, the number one question I received was which options to preselect: out-of-the-money (OTM), in-the-money (ITM), or at-the-money (ATM).

Continue reading "Which options to pre-select: OTM, ITM, or ATM?"