Choosing The Best Option Expiration || Day Trading Options
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- čas přidán 18. 05. 2020
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When trading options, TIME is your worst enemy. You can be right on the underlying stock direction, but still lose money if you do not trade the right expiration. Not only do you have to care for direction, you have to care about TIME.
I stick to these rules:
1. Never play the current week expiration after WEDNESDAY unless I am scalping.
2. Will play 0DTE (days to expiration) IF I AM SCALPING.
3. You can never go wrong in buying time. Play contracts where time will not burn your position.
Link to Picking Strike Price Video: • Picking Your Option St...
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DISCLAIMER: Please note that i do not ask for any information. I always encourage our members to trade ONLY what you understand and never based on anyone's opinion. My videos are for entertainment purposes only Any questions to message me as I would love to be a part of your success.
Hands down, best visual example of Theta burn I've seen so far!
Nicely done!
I have been having such a hard time understanding this concept. The past month my hit rate was around 70%. My reads were great, stocks moved in the direction I predicted, but I lost because of the pull back and not taking profits on the zero day contracts. Thank you, this really helped.
dude the amount of clarity this video provided is ridiculous! thank you!
It’s a great video how you laid it out, and so important. I’m looking for a theta number to reference for day trades. Below .5 so far. Over 1.0 and damn you better be scalping brah
nice one carmine ! i've been looking at a lot of option videos , and yours was simple , and full of great information . keep going brother !
Very good video, showing that if you are doing a full 1:2 R ratio, you need time. Scalps are for same day. I like to trail tightly on those same day contracts cuz those clap me if I hold an extra minute or two
SOOOOOO HElpful thanks dude! This just became my fav channel
Bro, thanks for info. Been searching google for this explanation for days!
Awesome video man! Was looking for something like this on options, however many people seem to promote only quick gains! Subsribed to your channel, thx for providing this valuable information and keeping it real!
Cheers!
Thanks for breaking this down. Its like knew it already but was just sticking my head in the sand.
Always easy to talk about what the right option trade was AFTER the fact and once you see how the stock/market performed.
Excellent video. So very true.... thank you for sharing your knowledge and expertise.
Thanks so much for sharing your knowledge, it means a lot to us newer option traders !!.…..So on expiration day,it's safer to choose an option that's in the money and cash out before noon .. basically correct ?
Great explanation and very clean to understand, this information wealth a lot, thank a lot my man Carmine
Another very informative vid thank you Carmine ! If you playing SPY on 0DTE doing a quick in and out scalp does that count against the day trade rule? Also I hav e a question about taking you course can ou do 2 payments?
that explains why i lost $250 today :( thank you for the video and thorough explanation!
That is a brilliant analysis. Very Informative.
I have been losing money despite predicting the stock price correctly many times. This video would've saved me so time and money if I watched it sooner.
The lower green bar and upper red bar. What are you using for this type of setup. Is this manually put into thed chart? Or do you use an indicator? Thanks for your time, it's greatly appreciated.
Outstanding video. Thank you
Can you do a video explaining how implied volatility also plays a role in contracts and how it works? I keep hearing of traders complaining how the underlying stock moves in their favor but they still end up losing money (like with this theta scenario). Thanks!
How do you determine the supply / demand zones that you show in your trading?
amazing explanation, perfect. thanks bro
How do you get the green and red boxes on think or swim,
Appreciate your videos brother!
Such an eloquent description Carmine. Can I request you to make more videos on the strike price and expiration days with more examples, please? It will surely help a lot of people like me.
Very insightful. Just found your content.
So if play the zero day or same week you can profit more? If your right compared to contracts 1 month ahead of time ? I'm still learning
So for wed, thurs, fri you wouldn't scalp same day expirations because of theta. So how far out would you go in expiration for a quick scalp strategy? I've been using same day expirations and was not aware about how risky theta could be.
You earned a sub my dude!
4:50 Example of theta burn on 0DTE, require strong moves sooner, can yield greater returns if given that powerful
10:20 Demonstrates theta burn comparison from 0DTE VS Weekly
12:50 Monday Tuesday 0DTE or weekly is fine, Wed-Fri consider playing next week expiration
Thx a lot, it is very helpful video.
Solid video there.
Any way to know to exit your positions for a profit even though it is not at the "Take Profit Level"? For example, @8:28 just take profit at 287 or maybe 286.25.
Is there a theta amount limit that you will set for day trades as opposed to scalps?
Carmine, your explanation of the supply and demand zones in your vids have been life changing for me. Random question. How do you change the opacity of your rectangles in TOS? Mine are nowhere near as transparent as yours, and I cannot figure out how to change it. Thanks.
Go to edit properties... then under "HSL" it will give you an option to change the transparency
@@carmine_rosato I don't see any "HSL" when I click on "edit properties" of the rectangle? Thanks!
@@katraju edit properties ---> color --->. more -----> HSL
Carmine, when u say zero days to expiration, do u mean the contract that expires today?
This video should have more views than it does.
so when day trading options its advised to choose an expiration that expires the week you are trading in??? Im confused did I miss something...
Ok. That one might fix my problems. I almost give up on the day trading.
damn i made this exact mistake today, only if you posted this video yesterday
I could not imagine holding options overnight. Goodness
Super helpful video, thanks
Glad it was helpful!
Id' love to see a video of a contract getting executed. I've been watching videos for 2 weeks and haven't seen one.
I learned a lot from this video, thank you, my question is, do you think its better to chart the actual stock or to chart the options activity?
stock 100%
Thanks my man.
Hi Carmine, I have a question, what if no one buying it from you when you are looking to get in and get out when the price is high.....
You are going to either get a bad fill, no fill or market makers
Carmine, you do a great job with your videos; you have taught me several things and I appreciate it.
W, Th, F should be for experienced and skilled
What expiration do you guys recommend for swing trading? I just got my gains taken away from me because of the theta :(
I always buy with at minimum 5 days and I sell the same day..
swing trade you want at least 30 days out, depending on your timeframe. If you are swing trading based on Weeklies chart, you'll probably want at least 2-3 months out. Daily chart then 30 DTE is fine.
You should also check how far away your profit target is. If your target is 50 points away whereas the daily range of your underlying is 10 points, that means you should have at the minimum 5-10 days, and that's even before considering theta.
Just go the furthest away you are comfortable with so theta won't even be a problem.
Great video, really opened up my eyes with this one! Quick question though, how do you get the cursor to mirror on one chart what your doing to the other?
It's under chart style and settings. I think it's on the general tab
@@clinclin1240 I see it now, I guess I just overlooked it before. Thank you
great video
Thank you !!
Excellent video ! - I want to share with you, I'm having some challenges selecting the right expiration date? If I'm trading a weekly option the expiration date should be that one? or another date? Tks !!
This is what I do.
Monday-Wednesday current week expiration
Thursday and Friday, next week expiration if I am not scalping
🔥
Idk if anyone can help me but today I bought a call option scalping and it went up $2.30 in the stock and i ended up losing, can someone pls help me out 😭
What strikes would you choose if your scalping with zero days to expiration? At the money? In the money by one?
Hi Carmine, i am quite confused, when you say stop loss. I thought when you are trading options, you do not need a stop loss because your already have max loss when you purchase the premium price? so let’s just say on a stock AYZ has a premium of $4.50 and you bought 1 contract, your max loss will then be $450.
Yes that would be your max loss if the premiums go to $0. But your stop loss should be based on your risk of the trade, which would be different than the full premium going to 0
Carmine Rosato just to make it clear, if i will close my option trade before the premium goes to 0, that i will loss less than the max loss amount? i really thought that i will loss the total cost of the premium of the contract if i close my trade early.
Yes you can close the trade before it becomes worthless for $0. So you don’t lose your full premium. You can close the trade early and only lose a little bit
Carmine Rosato that’s great man, that answers my question. Now i won’t be afraid to learn trading options. I am a new subscriber to your channel and your vids by far educational. Keep posting more videos man 🙏
Will do. Thanks, glad i can help💪🏽
Do you have a class or a course and all that good stuff. I don't have Instagram
Yes investitrade.net
Hard to see screen
More videos showing step by step of how you actually enter and exit trades ... there are videos out there but it’s more of the “gurus” saying “now I’m getting in” or “now I’m getting out” and all you hear is clicking on the keyboard but not showing much
Thank you for the video idea Robin!
Paste your contract into the symbol box on active trader and execute one click if you turn that button on. Best for scalping. Good video I learned from Umar’s active trader vid
Volatility also decreases the value of the options
not necessarily
Why do same day expiration options give you more return
Same Day Expirations Options Give You Higher Returns Because Of Time Decay & The Dirt Cheap Prices Of Options Premiums.
@@ronaldvaughn7087 Wow I was such a noob then. Now I’m trading verticals. Thanks man
@@Kloutkulture Hey, Glad I Could Be Of Help My Man, Best Always
@@ronaldvaughn7087 same to you
ATM near-dated gamma is nitrous on a drag racer.. if you catch trend momo these options will explode.
Rule of thumb:
ATM - best $ gains
OTM - best % gains
ITM - worst $ & % gains
He said Monday and Tuesday are good expirations only which doesn’t make any sense because you want to go out with a further expiration for entry day trading. Wtf
If you are scalping or day trading theta makes little difference!
Yes!
Day trading Tips:
1. If you don’t understand options greeks, stay away from options until you do
2. Options with ~ 30 delta are generally your best risk/reward ( delta > 50 shoukd be smaller positions (or only for spread hedging), delta < 20 generally beed to be larger to make the risk worth it, unless it’s a simple and small bet.)
3. Never let a green trade go red. Sometimes buying OTM never gets ITM, but that doesn’t mean a trade can’t be profitable, manage risk and use BE and SL to your advantage.
incoherent