Zero Days To Expiration

Liquidity is the biggest problem these days for the options trader. You enter a trade thinking you have a shot at collecting some rich premium, and then the trade dries up, everyone goes home and takes their ball with them. Using Max Pain we can identify these traps and find places where we can avoid getting skunked.

Have you ever heard of a tranche in trading? It's a weird French work that simply means part of something. In our case it is part of a trade or an opening position. In this episode I explain how crucial it is to master your tranches.

Let's face it, there's something called systematic trading, which we all at some point think that there must be some well thought out system that works, all we have to do is become a computer and execute with deft precision. Then there's the discretionary trade, where we use SWAG.

Most traders have fallen into the trap of over trading, or trading too big, or making a fat finger mistake. The day starts, the routine begins, and you are set in motion looking for the opportunity to enter the market. Sometimes the setup isn't there, but you drudge on. There comes a point where the process comes to a dead end...that is what this podcast is about.

Are you one of those people with trend lines thrashing your charts and rows of indicators squeezing you candlesticks to the top? Then you need some serious help to rid yourself of all that garbage that has no edge and that secretly confuses the hell out of the experts, though they pretend like they can explain any ambiguous reading. Then you need Volume Profile and completely eliminate all your indicators and clean up your life.

Woo Hoo! That is the essence of asymmetrical trading. We've got nothing to lose and everything to gain. Just put our faith in the strategy, and the market will either pin us, or it won't The cool part is that we win big prizes for the pin, AND we get great conciliation prizes if we miss.

A conversation with my friend about how those unexpected things that happen, truly extraordinary things, that we claim never happen, yet they happen all the time...weird!

Our trades are vega negative and theta positive. What does this mean? It means that when the market drops and volatility spikes, we smell opportunity, and we seize it.

Brand new year.