Trade Findings and Adjustments 04-25-2019
OK two things I want to go over today and neither put me in a good mood!!
Let’s first start out with “trading rules”
For the most part = trading rules are for those who can’t seem to think for themselves, want to be lead around by the nose and always want to blame something else on their bad trading results !!!
The market is an ever changing, ever moving, volatile beast!!!!
The collar trade is the only finite rule based trade that works every time but has not timeframe
Simple rules/suggestions that are bendable like:
I don’t like to trade the first hour the markets are open
For a credit spread 30< or less
For a debit spread 60 days or more
Here are some that have cost people dearly:
20% return OR let the trade run
NOT a repeatable process
The work Rule indicates Always
Second let’s start out with what “I’m” Doing and why!!!
Earnings and there are time stock ownership is important when you just aren’t sure
MU BTO shares and $43.45
BTO Long May 31-19 PUT @ 43.50 strike $2.00
New Cost basis $45.45
New risk $1.95 = 45.45 – 43.50 rt to sell
To lower the risk even more
STO a $47.50 May-31-19 Short call for $0.60
Over risk in trade $1.95 – 0.60 covered call credit= $1.25 or 2.78% Risk on TIC
Max return w/out adjusting 47.50 – 44.80= $2.70 or 6% ROI