Trade Options Like a Pro

How to pick the right strike/date

March 15, 2023


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1,000,000s of people started trading options between 2020 - 2023.

But 98% don't know how to pick the right strike date.

There are 5 steps to successfully choosing strike dates.

I’ll break down each after a word from this week’s sponsor.

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1. Find tools that work

For me, this starts with removing the option chain.

Instead, I use the Optionality app which offers pre-packaged option trades showing:

  • Max loss/gain

  • Breakeven price

  • % move required

Optionality makes the research and execution aspect of trading options easy.

Here’s what it looks like

2. Choose to be a day or swing trader

Day traders/scalpers are in and out.

Swing traders buy & sell over the course of weeks or months.

Buying yourself extra time in a trade often works best for beginners.

As you become more confident in your craft you can adjust.

3. Know your strategy

  • Tech stocks

  • Commodities

  • Industry specific funds

  • Dividend stocks

Options can be traded on all of these but each acts differently.

But Optionality lays out high/low confidence plays across different stocks and packages them for you.

4. Know your risk tolerance

Options are generally more volatile than common stock.

Bigger risk = bigger reward.

Optionality ranks trades into risk buckets of low, medium, or high & provides insights on upside/downside. This allows me to pick trades that match my tolerance.

5. Use data (not emotions)

The market is volatile.

Too many people rely on feelings.

Emotions drive bad investing habits.

Optionality gives many indicators, packages, and analyses you can use without letting your emotions win.

6. Bonus Action:

Use Spreads I know I said 5 actions but using spreads can significantly reduce risk and exposure.

Don't know how to use them?

Optionality packages the spreads for you AND explains how they work.

But that’s not all the good news…

The best part is Optionality is free.

Note: The Optionality brokerage is only for US customers on mobile devices at the moment.