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The Option Pit Method Using the B.E.T.S. System to Develop Trade Ideas

The Option Pit Method Using the B.E.T.S. System to Develop Trade Ideas. Option Pit Disclosure.

daniel_millan
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The Option Pit Method Using the B.E.T.S. System to Develop Trade Ideas

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  1. The Option Pit Method Using the B.E.T.S. System to Develop Trade Ideas

  2. Option Pit Disclosure The materials presented from Option Pit LLC are for your informational and educational purposes only. Option Pit LLC nor its employees do not offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk. Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. Specific trading ideas or strategies discussed in the presentations or materials are entirely illustrative and do not constitute a solicitation of a transaction (or transactions) or a recommendation to execute a particular transaction or implement a particular trading strategy. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Use caution when entering any option transaction and it is recommended you consult with your financial advisor for investment, legal or tax advice relating to options transactions

  3. Outline • What is B.E.T.S. • Breakdown of each word • How To Implement this trading approach • A Breakdown of B.E.T.S. implementation in a stock

  4. The Questions of my Nightmares • Should I buy this stock? • Mark what do you think of stock XYZ? • I want to buy a call in this stock,  what should I buy? • Mark what stock do you like right now,  and what type of trade would you execute?

  5. What is B.E.T.S. • I developed BETS as an acronym to walk people through whether or not they have a stupid idea (hint most of the time they do). • By following this system people can take an idea and develop a trade

  6. What is B.E.T.S. • B: Background • E: Energy • T: Time • S: Strategy

  7. Background • Every investment or trade should have a background story to it • The story is the reason you are interested in the trade • The background story is what has happened in the past and why is what has happened in the past the same or different than what will happen in the future

  8. Background • Background answers: • Stock will go up • Stock will go down • Stock will NOT go down • Stock will NOT go up • IT IS THAT SIMPLE,  not story, no investment, not trade

  9. Energy • How much movement does a stock have • Is the stock whipping about • Does the stock have momentum • Does the stock have chop • Is the stock on a slow climb higher • Could the stock GAP

  10. Energy • The energy essentially answers whether the stock is volatile, and if the stock has momentum in its movement • Stocks with low energy may make great investments but make bad trades (could be option selling candidates) • Stocks with high energy can develop into a trade

  11. ULTA

  12. ROKU

  13. Time • What is the time horizon of the trade • Is it going to move in a week • Is it going to move in a month • Is it going to move in a year?

  14. Time • When will you enter the trade • When will you exit • What are the profit targets • If the profit doesn’t hit by the date,  what would you do • When do you give up on the trade

  15. Picking the Time for an Option • When are earnings based on below • If I think its going to move in 2019,  what do I buy, what about after Jan 2020?

  16. Strategy? • How are you going to express the trade itself given the B.E.T. • Do you want to buy the stock,  go long a call,  sell a put,  or put on a credit spread • What about something more complex like a butterfly or a calendar?

  17. Strategy • B:  do I want to go long or short • E:  do I want to go long or short options • Now I know if I want to sell put or buy call • Do I want to spread? • T:  What is my time period • Now I know when to put my trade • S:  build the actual trade using the above • Price goals build the spread

  18. Strategy • If I think the move is going to be strong I buy options • If I think slow,  I sell options • If I have a target I spread to lower the cost • This is also where implied volatility comes into play

  19. Strategy • I use IV to help with the buy or sell • Determine relative cost • I use skew to help with strikes • And I use term structure to help me with the time piece of the trade • I sell in front and buy behind • Let's walk through a quick strategy

  20. HI HO Silver Membership Think BETS is difficult?  Join our Silver Membership and get 1 Actionable BETS idea a week,  followed from start to finish • The Option Pit Tuesday Trade • A weekly report covering markets with an actionable stock specific idea per week • Trade Idea text messaging • We send you our Tuesday Trade opens and closes via text message • Weekly Video content walking through our Tuesday Trade • The Option Pit Markets Show: Our weekly show covering markets and trades • Hours of Educational Videos • Access to our Monthly Class Room The Silver Membership is only 97.00 a month register NOW https://optionpit.com/silvermember Email: info@optionpit.comphone: (888) TRADE-01 (888-872-3301)

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