#171 - Can I Still Enter Your Trades Two Or Three Days Later?
Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. Today, I’m going to answer a question, “Can I still enter your trades two or three days later?” As part of our pro and elite membership, I obviously published the trades that I do. These are not buy or sell recommendations obviously of any kind. It's just truly what I do in my account. And so, people always try to mimic what I do and they try to ask like, “If you entered a trade on say Monday and now it’s Thursday, is that trade still valid?” Here’s what I say to people in this and that is that what you should always try to do is you should try to mimic the strategy or framework of what I was trying to do. That doesn’t necessarily mean you need to mimic the exact strike prices that we did. It means that you should mimic the framework. Let’s say on Monday, the stock was trading at $100 and I sold an iron condor around this stock at $100, spreads were $5 out on either end, but now on Thursday, the stock is trading at $105, well, now, you need to use $105 as the center of your trade and then start selling options maybe $5 out on either end. You’re using the same strategy, the same framework, an iron condor strike about $5 out on either end as the new basis for making that trade and you just need to basically move your position with the market higher or lower. At the same time, you also need to try to get the same general credit. If it’s a couple of days later, let’s say I sold my initial iron condor for say $200. You might want to sell yours for something around $200. It doesn't have to be exactly $200. Maybe it's $205 or $198, somewhere around $200. You want to still try to mimic the pricing, the framework, the strategy of what we’re doing. You don't necessarily need to trip over yourself to get into the exact same trades that we’re doing because ultimately, markets move, underlying securities go up and down and so, we still want to be neutral to that new market pricing, the new expected move that the stock has. A short one today, but hopefully this helps out, answers the question. As always, if you have any comments or questions, let me know. Until next time, happy trading!
