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Today's Options Trades with a Hypothetical Model

Options Trade Suggestions

Dear Readers,

Please note that the following content presents hypothetical potential options trades for educational purposes and discussion only. It is essential to exercise caution and consult with a qualified financial advisor or professional before engaging in any options trading activities.

The purpose of this content is to stimulate thought and provide a platform for educational discussions surrounding options trading strategies. The trades presented are purely hypothetical and should not be construed as investment advice or recommendations.

Options trading involves inherent risks, including the potential for substantial losses. Prior to executing any trades, it is crucial to conduct thorough research, evaluate risk factors, and consider individual financial goals and risk tolerance.

Model Parameters and Instructions

  • The objective of the trading model is to leverage short-term signals in order to achieve daily positive returns in trading.
  • The trade ideas provided are based on market data between 3:30pm and 3:45 pm ET. Model assumes the trades are executed before 4:00pm ET.
  • Trades are executed before the close of the day using a trailing stop in the range of $0.05- $1.0 based on the asset traded.
  • The model's time horizon is 1 day to a few days.
  • Signals rated as strong to very strong, with a proper trailing stop and stop loss, have shown a higher win rate.
  • For strong to very strong signals, a stop loss of 5 cents is used, while tighter stops are employed for weak signals.
  • Strong and very strong signals are typically traded with 5 contracts, while weak signals use 1 contract.
  • If signals are volatile or lack clear insights, the model may choose not to take the trade for multiple days in a row.

Asset Strength of Signal Direction of Signal Potential Trade
VIX Index Strong Down Model likes to Buy an ATM Put Option or Sell a 20-40 delta Call Option with 30-45 days to expiration
SPY Very Strong Up Model likes to Buy an ATM Call Option or Sell a 20-40 delta Put Option with 30-45 days to expiration
QQQ Very Strong UP Model likes to Buy an ATM Call Option or Sell a 20-40 delta Put Option with 30-45 days to expiration
  • *OTM = Out of the Money Option
  • *ATM = At the Money Option
  • *ITM = In the Money Option
  • * Delta = Probabilty of Option expiring in ITM if held until expiration

Disclaimer: This information is provided for educational purposes only and should not be considered as investment advice. The trades suggested are hypothetical examples and do not represent actual investment recommendations. The trade ideas presented are the view of the author and are not affiliated with any firm. The author has no financial compensation tied to these trade suggestions. Trading options involves risks, and it is strongly recommended to consult a qualified financial advisor before making any investment decisions. We do not assume any responsibility or liability for the accuracy or completeness of the information provided.

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