How to Strategize Weekly Options Trade.

Kristin Alonzo

19-Dec-2017 15:02 PM



This article is for Medium to Advance level for Option traders.  For Option traders like me, Friday could be the best or worst of your trading day of the week, when you nail the correct movement of a stock utilizing weekly option it can pay a handsome return of more than 100% in minutes or it can easily go to worthless or zero.  In Option trades, timing is everything, treat it like a time bomb as it has Expiration date, you need to be deep ITM (in the money) to profit.

Here are some of my personal strategy I use for signals on entries and exit for my daytrading and short term  Option weeklies trade.

  • First, scan the daily chart.

  • Second,  narrow it to intraday time frame of 1 min, 2min, or 5minute, use whatever suits your trading style, identify support and resistance level, then execute.

Alphabet  (GOOGL):   The daily price channel has been in indecisive motion, favoring the upside bias riding the 1050 bullish level, also SPX has been on tireless record high print throughout the week.   The ? days of hovering rally attempt resolutes higher.

  • What  I love the most of  Alphabet (GOOGL) chart is that, the intraday opening low was at  #1060,  so what’s unique with 1060?  1. It remains positive for the day (previous close at 1057)  2nd it is whole number, (there is no study written on whole number bullish thesis, it is my own preferred pivot level).  Using 2 minute channel, I choose to use the #1065 pivot level signal for long entry.

  • From there I traded the 1065C at $2.09 or $209 per contract, and my plan was to sell at $1071 underlying or $6 pre set order, targeting +189% profit. During lunchtime, it hits 1071 my exit target.  

“Time is of the Essence” trade approach on weekly Option trades.  My sole intent is just to trade premium not to exercise the right to convert it to common shares.  Keep in mind, trading Options is RISKY.  See chart annotation*

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17-Dec-2017 20:20 PM

Thanks you for sharing Kristin - clarified a lot for me.

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