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Beginner and Small Account Trading Group Nov 9

Discussion in 'Beginner Traders' started by status1, Nov 12, 2017 at 1:11 AM.

  1. status1

    status1 Well-Known Member

    I noticed something on the Nov 9th presentation that I just wanted to point out and perhaps Tim can explain in the next presentation
    On the TOS analyze tab where it was shown how to turn a vertical into a diagonal I noticed that the date was advanced to 12/8/2017 which was only a week away from one of the expiration so while the p/l would still be positive it would not be as dramatic at over $3K
     
  2. Tim

    Tim Well-Known Member

    Hi, I ran the simulation forward so that I could better demonstrate what happens when you turn a credit spread into a debit spread. It was just an example, you could do this at any time in the lifetime of the trade you would have to develop the strategy and guidelines around when to do this and at what trigger. Mostly I wanted you to know that it can be done, because most people don't think this way or realize that it is fairly simple to morph one structure into another.

    Its true that with 7 DTE to go, it might not be as advantageous as earlier when market has more time to then go in your favor.
     
  3. status1

    status1 Well-Known Member

    I understand your reasoning I just think that when it was turned into a diagonal the time should have been reset to the current date to show the price at the time the trade was made and than advance the time forward rather than make the trade at 7DTE and imply that the trade will make $3k at that time
    I just thought it would have been more realistic and not give any beginning traders a false sense of quick profits at 7DTE
     

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