The Ultimate Guide to Strangle Trading!

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The Ultimate Guide to Strangle Trading!

Рет қаралды 10,288

Күн бұрын

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Not Financial Advice! This content is for Entertainment and Educational Purposes Only. All financial decisions made by the viewer should be done after talking with a licensed professional.

Пікірлер: 70

@ngphil11 2 ай бұрын

Great overview. You should also mention what you do for risk and loss management when the trade goes against you. It’s not about how much you make but how little you lose!

@Kk-iw4ck 2 ай бұрын

kzfaq.info/get/bejne/pNVplsqa0t-mdoE.htmlsi=p9bgxjBKPPvFDk1S

@otisshaw1 2 ай бұрын

I thank god daily that I found Tom King , Sweet Bobby Gaines, and uncle Tony. My trading has hit levels I could only dream of and I will be able to retire at a young age.

@AString95 2 ай бұрын

Going from single stocks to futures has changed the game for me. I’ve been consistent the entire year. Only up 12% but I will take it. 112s, strangles, short puts about covers it for me.

@markexterkate7 2 ай бұрын

That is a great performance. This year SPY does better. Sure. But most of the years spy does not rise that much and than this strategy will outperform. Good job so far with 12%. Keept it up. In a year you make 25%.

@AString95 2 ай бұрын

@@steve99912 if I can keep up 2% per month that’s 24% per year. That’s over double spy average. Plus I’m hedged. Im much better off than SPY. SPY right now is doing better than it normally does. One key factor you ignore is the 2% a month is not contingent upon SPY going up 2% a month, it’s contingent upon SPY not going down 20% in 4 months. I prefer the latter. SPY goes sideways or even down I still get my 2% a month.

@AString95 2 ай бұрын

@@steve99912 nah because I’m hedged and don’t need SPY to go up 2% a month to get my 2% a month. I can get 24% a year and that’s over double spy average.

@AString95 2 ай бұрын

@@markexterkate7 thank you

@AString95 2 ай бұрын

@@steve99912 I’m hedged and don’t need SPY to rise 2% a month to get my 2%. I’ll keep at it. Spy is outperforming the average this year.

@kapilram8295 2 ай бұрын

Great Job Tom as always, demystifying and making it simple for retail traders; a very well-balanced presentation! Bravo! Keep it going Champion / Master Trader and sharing your wisdom!

@robmccance 2 ай бұрын

Great intro video for new folks to strangles, Tom! I did this for two years. Turned $30k into $130k one year. You really don't need ANY chart analysis, like you're doing. All the math and odds are done for you by the all the exchanges pricing the options. Simply go sell 7, 8, 9, 10 delta strangles in GC, CL, etc.. 45-90 DTE Most braindead strategy ever. The most important advice is to have a stop loss exit and stick to it. A loss of 2x the premium sold is a good one. Yes, many times it will come back but who cares - move on. You will have many more winners than losers. Why did I quit? Now I trade futures in a prop firm. Zero risk and I can make as much as a 45 day strangle in 15 seconds. Though watching this video nakes me want to do this again in a little side account...

@intoodeep001 2 ай бұрын

Almost had me for a minute, I thought you were serious until the prop firm comment then you lost all credibility.

@robmccance 2 ай бұрын

@@intoodeep001 Hmm. If you're going to fool around daytrading futures, it's the only way to go. Get educated my friend.

@robmccance 2 ай бұрын

@@intoodeep001 well good thing you're not the credibility police

@shaunglendinning 2 ай бұрын

Another awesome video Tom. Simple and basic if (Big 'IF') implemented and managed correctly. A powerful strategy indeed. Always a pleasure and privilege. Best.

@kss1973 2 ай бұрын

I've recently found your channel and started trading these strategies. They have been a game changer. Thank you so much for sharing your knowledge Tom!

@vs7185 Ай бұрын

Thanks for your excellent videos, Tom! You have been a teacher for me.

@AmGoWha 2 ай бұрын

Thanks Tom, very informative and well presented. Much appreciate.

@damienthedragon6987 2 ай бұрын

This is a really good intro video to strangles on futures

@ZeroHedge-ie3pe 2 ай бұрын

Thanks Tom, I will give it a try!

@Brucysboy 2 ай бұрын

A very valuable video again Tom especially for me a new trader with limited funds so have to protect my account as much as possibles. Thank you

@EVangelist-805 2 ай бұрын

Thanks for another valuable video, Tom

@jmiller4924 2 ай бұрын

Thanks Tom. I have been 'investing' for years but your videos and methods have helped me immensley and put me light years ahead of where I was before I found you. This year has been my best and most consistant year ever and we are only half way through

@TommKing13 2 ай бұрын

That is awesome to hear!

@theshovel881 2 ай бұрын

I love it king tom. Your a beast

@lupolino23 2 ай бұрын

Great video…as always!! 🙏🏻

@andymassey-pl1bg 2 ай бұрын

Thanks Tom, good vid.

@antwerks1 2 ай бұрын

what should we be watching for in terms of having to correct our positions? what if the slope increases or decreases more than normal? what are the corrections or is it just get out?

@tomashrncir970 2 ай бұрын

would you imagine to have a portfolio only made from strangles - 10 different futures, 90 days, delta 5? great video btw

@TommKing13 2 ай бұрын

I think it is possible. I don’t know that I would do it necessarily, but I think the opportunity is there. Five Delta is a bit low for me. I would like something between six and eight Delta personally.

@apologeticinsights Ай бұрын

Tom - Thank you so much for your wealth of quality information. Could you please explain your technique for exiting at 3X the Strangle Credit. I'm told by Schwab/TOS that automating that process isn't easy since you're dealing with a derivative of a derivative. I'm thinking of just setting up a chart alert but that wouldn't be very helpful if, for example, gold or oil exploded or free fell at 2am while I'm counting sheep. Can you provide further guidance on this subject? Thanks in advance.

@millenialmusings8451 2 ай бұрын

Hey Tom, one question - is equity considered in Net Liq while selling options on futures? For example, 90% of my IBKR portfolio is in SPY ETF and only 10% cash. Do I need to sell it and convert it to cash for the margin requirements? Thanks

@ChiIeboy Ай бұрын

I get that a naked Call option comes with an "unlimited potential loss," but I don't understand how the potential loss is unlimited on the Put trade. Worst case, we're obligated to buy the shares if assigned, _but at a price known in advance_ (i.e. the strike price), so that's not "unlimited." Am I missing something?

@HedgeFundOfOne 2 ай бұрын

There's a reason why IV is high on volatile stocks. Even the market makers are concerned so they require the higher risk premium to sell the insurance that is options.

@tz8565 3 күн бұрын

5:50

@theworkinginvestor 2 ай бұрын

Great video. Whay are your thoughta about a covered sttangle compared to a naked strangle?

@TommKing13 2 ай бұрын

I love the covered strangle and its one of my strategies.

@antwerks1 2 ай бұрын

what is a covered strangle?

@williampruitt6978 9 күн бұрын

Higher the volitility the riskier the trade…. DUH, been saying that for years 😂

@antwerks1 2 ай бұрын

You had at one time talked about strike prices interms of delta 6delta and 7 deltas - is this still valid?

@Lyokou 2 ай бұрын

I didn’t like 112’s that much. I still use them, but the premium on the underlying I use aren’t hitting my profit targets and it locks up BP for a long time. I’ve been mostly doing strangles this year. I like that they’re shorter term, around 30 days, not 60 to 120, and I like the return on margin.

@Ballr1994 2 ай бұрын

What deltas are ideal for selling strangles? Didn’t catch that in the video

@TommKing13 2 ай бұрын

I prefer between six and eight. However, there are times when I could go a little higher or a little lower, depending on the return on margin.

@antwerks1 2 ай бұрын

do you put in a stop at 50% profit?

@areklis9574 2 ай бұрын

in this market playing strangles on ES is suicide.

@TommKing13 2 ай бұрын

I’ve only traded one strangle on ES all year. I do not trade underlings that do not set up correctly for my strategy. Yes has not set up properly nearly all year.

@bradbrad1126 2 ай бұрын

ZB is being unpleasant for me atm.

@2023Red 2 ай бұрын

@Tom. I followed completely. I am lost on position size. When you say 2%, does that mean on a nominal $500,000 net liq account, that the max profit is $10,000? Or, if the buying power impact is for example, $40,000 that the position size is $8,000? And, it gets more confusing when using /ZB as it is not in dollars. Can you keep it simple? Thanks Robert P

@Squeak825 2 ай бұрын

What that means is that you size it so if you get stopped out that the maximum you will lose is 2% (so $10k).

@seanhutcheson7638 2 ай бұрын

It means max loss should be 2% of your account ie. If i have a $10k account, my max loss is $200. If i use 50% profit target and 200% SL i need to size my strangles to make $50 profit with a SL of $200. Applies to all underlyings.

@2023Red 2 ай бұрын

@@seanhutcheson7638 Ok. How do you calculate with /ZN? Or when you collect $4000 credit from short Strangle with /6A?

@Lyokou 2 ай бұрын

2% of net liq (the total account). So on 100k the SL is 2k. So a strangle for 100k should have take profit at 500 using a 200% stop loss. You can also adjust the stop loss to 150% if you’re more conservative. Tom uses a 6/7 delta strike, but you can move that to 5/5 delta if you need to size your strangles to a smaller account or want to be more conservative. At the end of the day you have to come up with a strategy and plan that fits your account, risk tolerance, and style.

@Nancy-cf5iw 2 ай бұрын

I had gc strangle and lost $10 k.

@shonnavalli 2 ай бұрын

I’ve watched so many of your videos, but I must say that you don’t talk about the mechanics of the trade - what delta do you sell your calls and puts at. If I don’t have that, it’s a waste of time.

@Kk-iw4ck 2 ай бұрын

He has a video on it it’s like a 5 delta on calls and puts

@Kk-iw4ck 2 ай бұрын

kzfaq.info/get/bejne/pNVplsqa0t-mdoE.htmlsi=p9bgxjBKPPvFDk1S

@TommKing13 2 ай бұрын

I just told you (again) where to place the shorts in this video. But if you think its a waste of time to learn something, stop watching.

@shonnavalli 2 ай бұрын

@@Kk-iw4ck - Thanks! With a 5 delta, I wonder what the risk to reward on the trade would be. I was hoping for a 20 delta at least to make the trade worthwhile For Credit Spreads - I need to be able to collect more than 35-38% of the width. If width is 5, I need to collect 2 at least. If width is 10, need to collect $4. Typically, that leads to a higher risk to reward. Additionally, this comes at a delta of around 35. I am sure strangles are similar.

@shonnavalli 2 ай бұрын

@@TommKing13hey, don’t take this the wrong way. You will be doing your viewers a favor if you spell out your exit strategy and trade mechanics - instead of saying I close the trade early. You could be more specific and say - I close the trade at 21 DTE or when I hit 50% profit - whichever comes first. Also when you say that you pick a strike 8% above and 8 or 9% below the current price - that means very little. You pick your strikes in relation with the premium you collect- so, what is that? Do you collect a premium of $100 to where your max risk is $1,000? Again, don’t take this the wrong way, just giving you feedback on how your viewers can improve their trades. Talk about the mechanics and risk, max loss and sizing.