The Lazy Guy Road to Riches Pt – 2

Table of Contents

In my last blog, I mentioned taking a straddle option position to take advantage of the excitement in the market about a Fed rate cut. Many novice options traders struggle with the types of options strategies to employ in many different situations. Most beginner options traders buy straight calls or puts because it is easy to understand.

So why use a straddle position?

Straddles (or even wide straddles, which I’ll describe in more detail later) are a good options strategy to use when you think the price of a stock or index will move significantly (either up or down) due to volatility. , market forces, technical indicators and/or some news that is about to impact a company or index. However, you don’t know which direction it will move unless you believe it will move in a big way.

A very useful tool that I often use when analyzing volatility and option pricing is You can use the basic calculator for free. All you have to do is enter your ticker symbol and click start! Everything is populated for you and you can choose the expiry date and strike price you want to analyze. Click Calculate and it will give you the value of the option and the Greek data. Very useful tool and I highly recommend you bookmark this site. Whenever you analyze options volatility to determine whether you can buy an option at a discount or sell an option at a premium, visit this site.

So why did I choose to invest in the Nasdaq 100 Index (QQQQ)? Technical charts show QQQQ in a bullish pattern. It is currently at a 52-week high, which is also bullish. Last but not least, because my mentor told me so.

What mentor you might ask? If you’ve read my blog post, The Lazy Man’s Way to Riches Part 1 , you know that I basically have a full-time job, a family, and a life. However, investing in stocks and options requires time, effort, and money… I can come up with money, but where can I squeeze in more time and energy? This is where my mentors come into play.

There are options trading professionals who devote 100% of their time teaching and teaching strategies and trading techniques to people like us. Over the past few years, I have subscribed to countless newsletters, trading software, and stock and options trading “guru” reports.

By subscribing to many different sources, I believe I have done extensive due diligence and removed the wheat from the tares. Over the past few years, « Wheat » has taught me and guided me through many options trades, helping me earn a second income. “Tares”…well, I threw them away like a hot potato.

In future articles, I will introduce you to some of these professionals and their services. I treat my investments like I treat my day job in the business world. I invest in the best people and let them do things for me. This allows me to free up time to manage my portfolio and enjoy life with my family while still making a good living from my investments.

I’ll let you know how it performs when I put my QQQQ straddle position into action over the next week or two. An important question regarding straddle trading is when is the right time to exit the trade. As of this writing today, the Nasdaq 100 Index (ticker: QQQQ) has broken through resistance at $50.60, with bullish indicators. I have exited my November 50 puts and will continue to hold my November 50 calls until the call run ends, or within 2 weeks (PS Keep in mind that time erosion will reduce the value of the option , so you should try to sell options 1 to 2 months before expiration).

Why don’t you join me on my journey and visit my LazyGuyOptionTrader blog. By signing up for my free newsletter, you will receive a free article on « How to Turn a Losing Stock into a Winner! »

Patrick Lim aka Lazy Guy Traderp, get up and go!

Source by Patrick Lim