Applying the Tastytrade Approach to Options Trading: Selling into Strength — LeoFinance

In my last post about trading options heavily, I analyzed a few of my trades and talked about the border portfolio that I was running. At the time (earlier last week) I had made about 20 trades. After the market closed on Friday, I’m now at 25 trades opened and 11 out of those 25 trades have been closed at a profit with 14 trades still open with an 8/21 expiration date.

On the latest LEO Roundtable, we talked about portfolio strategy and what I look for when I put on a trade. As of right now, I’m following many of the Tastytrade best practices. If you don’t know what Tastytrade is, I highly recommend checking them out. They are the epitome of options education in my opinion.

There are many core concepts that Tastytrade talks about frequently and they have done extensive research over the past decade to back up all of their claims. That is one thing that I particularly like about their approach — they don’t just talk about best practices and what they believe to be right, they actually back it up with real data that can be put into practice by you and I.

Selling Into Strength

When I’m finding an underlying stock/ETF to trade, one of the first things I look at is where the stock is trading on the day. Is it up or down? Is the move big or small?

If the stock is up, I’ll open the chart and check the IVR (I’ll talk about IVR in a future post). If the IVR is high and the stock is up over the past day/week, I will look to sell a call credit spread. This is called selling into strength and is one of the most important facets of the Tasty approach to options trading.

… Continue Reading: https://leofinance.io/hive-167922/@khaleelkazi/applying-the-tastytrade-approach-to-options-trading-selling-into-strength

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