WORDS OF WISDOM whether trading stocks or options
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Hi Everyone! | ||||
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HOLDING BACK MONEY just in case your trade idea goes against you Legging into trades means the same ... you don't take a FULL BITE up front rather you 'leg' in 100 here, 100 there to see how the trade idea goes. Recently I did a Cash Secured Put where I wanted 300 shares of a stock (MARA) but decided that I had better hold back some shares just in case the trade idea were to go against me ... so I decided to do 200 shares vs 300 shares This turns out to be a good move as MARA is falling -6pts today. By holding back the 100 shares ... it gives me an opportunity to take advantage if the stock were to fall ... allowing me to Dollar Cost Average. With MARA falling another -$6 today that gives me an opportunity to slip in and use that extra 100 shares to do another Cash Secured Put if I felt this was a good time ... For me, I wanted to own 300 shares of MARA so this will allow me to have 300 shares but not at $55 where I did the 1st Cash Secured Put ... rather instead lower ... probably around $52ish Now where the stock goes from here I have no crystal ball ... but at least by holding back the 100 shares I am able to Dollar Cost Average down making it probable for me to obtain the shares and Write a Covered Call where my stock purchase price will be at or under my Covered Call Strike Price ... that would be the most optimal situation If I leg in for 200 and the trade goes well... the stock moves higher and I don't get the only 100 in the game ... its ok, I have good skin in the game, we move one. MY WORDS OF WISDOM I TRY to NEVER TAKE A FULL BITE!!! - timing the market is hard to do. If I want 300 ... I do 100, 100, 100 or 200, 100 Because sometimes ... it can REALLY go bad and by doing this I've saved my ASsss! | ||||
As always, do your due diligence and this is not a recommendation |
Until next time, I wish you the very Best In Trading! | |||||
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Regards, | |||||
John | |||||
email me corepositiontrading@gmail.com | |||||
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