Episode 277: Weekly Options for Day Trading

by robbooker on August 4, 2014

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In Episode 277 of The Traders Podcast, your host Rob Booker kicks off the show by talking about some recent computer woes and Matt LaCoco’s mind-blowing computer specs. Then Rob announces the limited-time availability of his much-anticipated new system:

Here is the link for Rob’sTRIFECTA 3 TRADING SYSTEM
(Trifecta 3 will only be available from today, August 4, 2014, through Friday, August 8, 2014.)

Next Rob talks about the books he’s been reading lately. And then there’s a discussion about a forthcoming trading eBook from listener and friend, Raihanaty. Next topic: A listener who’s been fairly vocal in his criticisms of Mr. Booker. Then Rob addresses a constructive criticism from a listener who complained that there’s too much non trading-related small talk on this podcast. After that Rob answers a question from Brian F. regarding weekly options for day trading. Rob briefly addresses the question of whether diversification works well for a trader. And finally, Rob and Jason conclude with the first four points of Serge’s 8 Things I’ve Learned From Rob Booker list. Thanks for listening.

Links from this episode:

Rob’s Trifecta 3 Trading System

List of available options that you can trade on weeklies: CBOE.com

Jason’s book recommendation: The Iceman: The True Story of a Cold-Blooded Killer by Anthony Bruno

Jason’s wife’s Book Review Podcast

Get our Traders Podcast App for iPhone

Get our Traders Podcast App for Android devices!

Read Rob’s blog articles

Rob Booker.com

RobBooker.com/mail

Call and leave us a voice mail: (801) 382-8789

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

E-mail us! Producer@TradersPodcast.com

Trader Interviews.com

{ 3 comments… read them below or add one }

Brian F. August 4, 2014 at 5:47 pm

Camera Problems: Rob’s fuzzy camera image made me laugh. When video conferencing became the new thing, we used to be subjected to repeated and unnecessary video conferences where people would talk for hours to a captive audience. That’s when I started covering the camera with Chapstick so the image was fuzzy and I could tune out and do my work in the middle of the meeting. Eventually, they lost interest and cancelled the meetings.

Troll: Trading can become a type of religion. People become very entrenched in the way they think about trading, and that’s one of the big no-no’s that leads to losses. They either love you for confirming their beliefs, or announce you apostate and a crackpot for going about it differently. (For example, “That trade will never work.”) But in a pursuit where most people lose, maybe following the beaten path isn’t so smart.

Weekly options: I’m not saying you can scalp with weekly options, but they could work for longer holds in a day trading system. The benefit here would be your position is protected from catastrophic losses because all you can lose is the value of the contract. Depending on the size of your account and the cost of the contract, this could enable you to do away with stops. It wouldn’t be a free insurance policy, because there is some time value lost on the contract. Maybe that’s cheaper than the hedge that Ryan employs to control risk with binary options. On the other hand, I wouldn’t doubt Ryan explored this possibility and opted instead for the binary options, but I’d love to hear his opinions on the matter. Anyway, all ideas about relying less on stops and controlling risk are ALWAYS a topic of interest for me.

Diversification: Your discussion regarding diversification was confined to one time frame, and considered whether we would be more successful trading one instrument or dividing our attention among two or more instruments. That depends on your interests and available time. Why not just sidestep the question and trade the same instrument on three different time frames? You could, for example, daytrade the Euro/USD, and swing and position trade it too. This shouldn’t add too much to your research as you are doing most of that work already. It’s not the prep work that should bog you down, it’s the journaling. There’s very little correlation between my prep work and my results. There’s direct correlation between my journaling and my long term results. Review is never a double edge sword, prep work always is.

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Ryan got bit by a Llama August 5, 2014 at 9:58 am

As far as the troll goes… Look. you help more traders, by a long shot, than you hurt them. If a guy is following you around just to slam you… he has issues and there is nothing you can do to help someone like that. they are angry and are not happy unless they hurt people. Shrug it off. Punch the pillow or whatever but the thing to help these types to go away is to toally ignore them. You just gave him fuel today.

As far as weekly options goes. they are flippin great! I trade weekly binary options on nadex and they can be the greatest thing since slice bread! They can be used as a hedge against spot positions as well. The strike prices are fantastic and if you wanted to sell them for premium, they offer a limited risk unlike regular weeklies that have unlimited risk. Look, if you sold a regular weekly 200 points above the market for $10 and it went 5000 points against you on a huge news announcement, you are down right screwed. On nadex if you sold one 200 points above the market for $10, and it moved 5000 points against you, you are out $90 max.

books you are reading… Rob, i would think you would be reading Archie and Veronica lol.

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Raihanaty A Jalil October 15, 2014 at 8:27 pm

Hey just wanted to say a massive THANK YOU for the plug. The book is on hold for the moment because I found myself actually neglecting trading :-S
I’ll definitely be in touch again when I’m ready.
P.S. I’m a girl 🙂 Mind you, the fact that I really struggle at multi-tasking (thus why I am unable to complete the book and trade at the same time!) sometimes makes me wonder if I may have have a Y gene after all 😛

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