163: The 5 Month "Grind" Following XLE Short Put Option Assignment

The Option Alpha Podcast

Kirk Du Plessis

Investing, Trading, Stock Market, Business, Options Trading, Education, Finance

4.8 • 1.2K Ratings

🗓️ 27 September 2019

⏱️ 42 minutes

🔗️ Recording | iTunes | RSS

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Summary

Show notes: http://optionalpha.com/show163

This was a long trade. Maybe not the longest trade we've been involved in, but certainly one of the top ones as this short put option assignment lasted over 5 months. For most options traders looking to make a quick buck, this trade stretches their patience and conviction far beyond a reasonable level. Still, I think that today's case study is important to hear because it proves critical concepts to how we think about trading here at Option Alpha. And what better way to prove something than to show you how we managed the entire position, start to finish, with real money.

Transcript

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0:00.0	You're listening to the Option Alpha Podcast from Option Alpha.com where we show you how to make
0:06.3	smarter trades learn how the stock market really works and generate consistent monthly
0:11.2	income. Now your host and head trader at option alpha.com, Kirk depluses.
0:17.0	Hey everyone, this Kirk here again from option alpha working every single week to make this the most popular investing podcast offered online and in iTunes because it's based on one thing and one thing only and that's helping you guys make smarter trades.
0:32.4	So again, thank you so much for tuning in today on today's show.
0:35.0	We've got a really good episode, another case study type episode.
0:38.0	Seems like you guys really eat this stuff up and love it.
0:40.0	And I like going through it because I think it touches on a lot of different topics
0:44.1	surrounding investing mainly the importance of patience and duration in trading. And so today we're
0:49.5	going to go through the five month grind that we had following our XLE short put option assignment
0:56.0	where we basically had to hold stock for many months we delivered this trade at
1:00.4	the end of five months finally for a profit at the end of the day
1:03.7	but it was a long grind for sure it was a lot of work a lot of massaging if you will
1:08.7	to get this trade to come back around and I think it really speaks to some of the key lessons that we talk
1:14.2	about here at option alpha again including patients duration rolling to
1:18.1	extend things taking in credits to remove or lower break-even points.
1:22.7	And I think it's a really good case study.
1:24.4	As always, we have a link in the show notes
1:26.6	to the video version of this case study
1:29.2	that I'm going to be referencing throughout the podcast.
1:32.2	This is the version that was sent out to our
1:34.0	prone to lead members the night that we close the trade so we always do a video
	...

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