Trading Lesson: Failed Gaps Can Lead To Large Down Moves– $BRCM

July 23rd, 2014 In this morning's AM Meeting I discussed a possible short setup in BRCM. I was very skeptical of the gap above $40 as this stock was trading at $30 a couple of months ago and only traded higher when they said they were hiring an investment bank to look at selling off some assets. In my view this was a good setup for "sell the news". It is the opposite of recent trades in SWKS, CMG and BIIB that I have discussed that are "buy the news" situations. As traders we need to evaluate each trade on its merits. If you simply short every gap for no rhyme or reason the market will eliminate you pretty quickly. no relevant positions Read more [...]

This Options Trader is Succeeding

July 23rd, 2014 I try to offer examples of best practices from succeeding traders and share them with the trading community. It is my hopesuccess.1 developing traders will co-opt some of these best practices and improve their trading. I have another one to share- this one from our options trading desk. One of the options traders on our desk just had his best month and I wrote him a congratulatory e-mail. This trader was taught from scratch by Seth Freudberg, Director of SMB Options, earned his respect from his hard work while training with Seth, and then was invited to trade on our Options Desk. Options traders are fully-backed by the firm- Read more [...]

Members Only Options Webinar: Alan Knuckman of Bar Using Options as a Stock Substitution Strategy

July 22nd, 2014 Your Option for a better trading life......together (SMBU Options Tribe) SMBU’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each Tuesday, SMBU hosts an options webinar—the Options Tribe—during which veteran options traders and experts in the world of options trading share live presentations. Next Tuesday, Alan Knuckman returns to the Options Tribe to discuss his use of options in lieu of long stock positions to achieve his investment and income objectives. This should be a great presentation, and space is limited, so you’ll Read more [...]

I Start My Stock Selection Here

July 22nd, 2014 It's officially earnings season. We trade in interesting times. How can you not love the Ackman HLF Dump Summit? Most of us on the desk were trading $HLF and piped into his presentation via NFLX reported and got beat up offering a series of excellent risk/reward trades for the short term trader. HOG got hit reporting shipments will be light for the year.  And there was much more.  It was a day of opportunity. During these interesting times it is important to prioritize trade opportunities. Last week we discussed the best practice of creating a road map for your trading. Continuing on that theme, I thought I Read more [...]

A Focus on Immediately Being in the Money Helped this Trader Improve

July 22nd, 2014 I had a conversation with one of the traders on our desk end of month congratulating him on his improved performance and  inquiring on the reasons for it. We sat in my office and I congratulated him on improving from consistently negative to flat for the month.   Come again Mike?  Why is that something for which to congratulate a trader?  I thought the purpose was to make money? Those of you who read my blog are aware that I view consistently negative to flat as a significant step.  It is.  Most never get here (to flat for the month) as a trader.  Granted we want better than flat, but you rarely see a trader go from Read more [...]

Options Trading for Income with John Locke for July 21, 2014

July 21st, 2014 Risk Disclosure No relevant positions A great way to improve your trading results is by keeping up to date with the latest trading techniques and current market conditions! Click HERE and join me every Monday at 9 AM EST for our free “Options Trading for Income” Webinars! Where you get expert analysis of the markets and the opportunity to follow along with the best options trading strategies in the business. And check out these great videos as well! May Group Mentoring Open House Part 1 May Group Mentoring Open House Part Read more [...]

How Do I Simplify My Trading?

July 21st, 2014 Dear Mr. Bellafiore,  My name is (deleted), and I’ve contacted you in the past. One of our conversations ended up on your blog and eventually made it into your book ( Your responses to my inquiries have always been courteous and insightful, so I’m turning to you once again for some more advice. With the full support of my spouse, I have re-entered the world of proprietary trading. I became completely fed up with the corporate world, and I decided that I wanted to try and take control of my life. The last time I sat on a prop desk was in April 2009, and Read more [...]

What Do You Need First to Gain Trading Edge?

July 18th, 2014 I have been listening to a great deal of the Toddler music channel on Pandora so pardon my lyrics. First comes skill Trading Skill! Next comes edge Trading Edge! Then comes trading profits in your head .....And in your bank! Our firm has edge during Russell imbalances.  I was discussing this strategy in theory with our college training class,  exposing them to the different ways traders can find an edge in markets.  One very ambitious student from China asked, "How do they do it?" This is a perfectly acceptable question.  Or is it? I didn't develop this strategy so I cannot share it.  It's not mine to Read more [...]