Ready to kick off your shoes and dive into the world of options trading without breaking a sweat?
Well, you're in the right place.
Let's talk about the Laid Back Options Trading strategy, a method that's all about balance, patience, and continuous learning.
But most importantly, a method about beating the market without getting a tad bit nervous.
Setting the Stage
First things first, let's set some ground rules. Remember, we're here to make money, but not at the cost of our sanity. So, we've got seven tenets to guide us on this journey. Think of them as your trading commandments, straight from the mouth of Yoda himself.
- Set an average weekly ROI goal of 1%: This is about setting realistic and achievable goals. It's not too high to be unattainable, but it's enough to see significant growth over time. If you try to get too greedy things will go sideways really quick.
- Limit your trading time to 5 hours a week: Trading shouldn't consume your life. This also forces you to be efficient and strategic with your trading decisions.
- Do your homework before entering a trade: This emphasizes the importance of research and preparation. This can help you identify the optimal entry point to maximize your potential profit.
- Never hold more than 20 positions at a time: This is about risk management. By limiting yourself to 20 positions, you can focus more on each one and make more informed decisions.
- Check your positions daily, but don’t fret about them: This encourages a balanced approach to monitoring your trades. Check in daily, but remember to stay calm and composed.
- Mistakes will happen - learn to ROLL with them!: Trading is a learning process and mistakes are inevitable. Use them as opportunities to learn and improve.The good thing about making mistakes with an option contract is that you can always roll them out and give yourself some time to make a strong comeback.
- As long as you’re earning premiums, you can afford to be patient: Patience can lead to more stable and sustainable profits in the long run.
Track Your Way To Compound
Recurring Income
We all know how frustrating it can be to track your trades in a monolithic spreadsheet that never answers the important questions. Am I making money? Am I taking on too much risk? Can I do better?
Optiontrack is built by laid back options traders - we know it works because we use it every day!
The Nuts and Bolts
Now that we've got our guiding principles, let's get down to the nitty-gritty of the Laid Back Options Trading strategy.
- Sell PUTs on Monday expiring on Friday: This is your starting point for the week.
- Watch daily (mid morning, Eastern): Keep an eye on your positions, but remember, no stressing!
- If PUTs are more than 5% in the money, consider rolling: This is where your patience and strategy come into play.
- If PUTs are more than 10% in the money - roll: Again, it's all about managing your positions wisely.
- On Friday, make your moves: Depending on where your PUTs are, you'll either let them expire, buy to close (I have to say that I rarely do this), or roll out a week at the same strike price.
- When you get assigned (it will happen), implement a covered CALL strategy: This is where you can really start to see your profits grow. (Let me know in the comments section if you want to know more about this).
- Compound all of your earnings back into your PUTs every Monday: This is how you'll see significant growth over time.
Remember, this isn't a race. It's a journey (even if you make it barefoot).
So take your time, learn from your mistakes, and enjoy the process.
Happy trading!
