#72 - How Many Stocks Should You Watch Or Trade At A Time?

Hey everyone. Welcome back. This is Kirk here again at Option Alpha. On today’s daily call, we’re going to answer the question – “How many stocks should you watch or trade at a time?” I think this is a hot topic because people get started into trading and not quite sure what activity level they should have with stocks or options. Should they be watching just the indexes or ETFs or should you be watching everything all at once? Now, on the furthest extreme, we know that we can’t just watch one individual stock or ETF. We know that we have to be watching more than that if we want to get a good idea or a breath of the market. On the other furthest extreme, we know that we can obviously watch everything, so what do you watch? I think the short answer to this is you watch the things that are liquid and the things that are tradable. That’s what I watch. I’ve narrowed down our watch list over time to about 80 or so tickers that are on the list. That doesn’t mean that we monitor each and every one of them every single day. By no chance do we monitor every one of them every day. But they’re on our list because they’re the most liquid, the most tradable securities that we can trade. Most of them are ETFs, but they’re also some of the higher value names or higher liquidity names like Google and Apple and Microsoft and Tesla, etcetera. Those are the ones that we watch. If they have a spike in implied volatility or big moves, then they pop to the top of our list for activity or IV spikes, etcetera. We have a pretty short or simple watch list that we go off of from there. After that, I have a separate watch list inside of my platform that I just toggle between and that’s just simply the watch list of ETFs. You can do this inside of our toolbox software on our platform at optionalpha.com/toolbox where you can toggle and look at just ETFs versus ETFs and stocks. That’s something that I do, so that our ETF list is much shorter because I tend to trade more ETFs and stocks as a general rule of thumb. That’s what I watch. I watch all the major market ETFs as well as emerging markets, currency, commodities, etcetera. That's really what we do. I mean, again, on an average day, I’d say I would probably glance at about 30 or so tickers. Really, anything after that and I’m not doing too much. I tried to make it pretty short and sweet every day. I think if you can narrow this down to say 30 to 50 tickers that you continuously watch and monitor, again, you don’t have to look at every single one every single day. But just having them on your list and then having a preset way to scan for trades or be alerted to new opportunities, whether that's a change in the price or whether that’s a change in implied volatility, those are two easy ways to just see what’s moving on a day to day basis without spending too much time typing in every single ticker and going through your watch list there. Hopefully this helps out. As always, if you guys have any comments or questions, let me know. Until next time, happy trading!

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