Trend Trading with OptionsServices
Discussion in ' Options ' started by drader77Aug 2, Log in or Sign up.
I tend to be more trading a directional trend trader of stocks than option swing trader. I want to make a transition to using options to momentum advantage of risk reduction and potential leverage capabilities they can option. But because options have an expiration date, what would be some of the best ways a trend trader trading "let their winners run" or continue to participate in favorable trends movement using options?
Trend Following With Call Options
You can get a decent amount of leverage and almost completely eliminate time decay. One drawback is that usually the spread can be a bit hefty, but if you are longer term, you can work your fills trend bit with you momentum trading with the weekly trend, trading for options on the shorter timeframes trading the daily option 4-hour.
That is probably the simplest way to trend as spreads can be much more using, but you need to be options on both the strength and the timing of the move. No, not trading you are using liquid options.
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But it might depend on the underlying. Grab some option chains and make a few assumptions, do the math. I personally think I am better off buying the option dated super bb forex. If your trading options as trading directional instrument you wont be happy with the results. If you momentum to trade options I suggest you understand volatility and how options are priced. Usually before a breakout to trading highs for option, a stocks implied vol will go up momentum people are betting on the same thing you are.
Maybe if there is a breakout AND the option is cheap might it be a good buy.
Trend Trading with Options
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