When opening a trade the first thing you need to do is choose something with. The platform has liquidity rankings to help with this process.
You also want to trade options on stocks with anof 50 or higher, and a time frame of 25-50 . Next, make sure the trade fits your directional risk tolerance from a perspective.
Use limit orders, and not market orders at. Allow enough time to get filled at the midpoint or close to it and don’t get caught up in short term swings. Have a target profit percentage for .
When selling options in the form ofor , the higher the delta of the strikes, the quicker you will want to manage the trade. See , a Skinny on Options Data Science from December 3rd, 2015, for the reasoning.
When closing trades you should manage your winners when the profit target is achieved. Use limit orders to avoid slippage and be patient, just like when opening the trade. Keep yourin check by not waiting to before closing a trade. A graph of a 50 Delta Straddle was displayed to drive home the importance of this point.
Watch this segment of “Best Practices” with Tom Sosnoff and Tony Battista for the valuable takeaways and an explanation of our checklist for entering and exiting trades.