In an effort to show people how easy it is to learn how to trade options, I’ve decided to open a new account with Tastyworks. This will be an interesting experiment, and I hope you enjoy.
Tastyworks is the best way to learn about trading stocks, options, and futures. Before you open an account anywhere else, I strongly suggest you check them out.
You can open an account with no minimum, and currently their margin requirement for margin accounts is $2000. You can trade stocks less than that, but if you want to trade spreads or iron condors, etc. you need margin.
Their fees can’t be beat, and the content and education that they provide is not like any other. I hope to have the time one day to do a full review, but honestly, I just don’t have time right now.
Looks to me that the ETF SPY has bounced off the Bollinger Band MidLine, and I think it will go up from here. To take advantage of that, I decided to sell an iron condor.
An Iron Condor is basically a put spread and a call spread. In this instance, I am selling an iron condor to open. I am choosing to sell the September expiration, which is 36 days till expiration. I sold the 281/286 put spread, and a 296/301 call spread.
I tried to sell it for 1.92 above. I had to work it, and end up getting filled at 1.90. So I collected $190.
My risk for this trade is $500 – $190 = $310 + fees.
So if I would hold this trade until expiration, which is 9/21/2018, I would hope that it is above $286, and below $296, and I would get to keep the premium I collected, $190.
If the SPY moves above 301, or below 281, the most I will lose is my max risk, 310. But to be honest, the content at Tastyworks teaches you how to minimize your risk in those situations, so a full loss is avoidable.
That’s it for now, I will update this as we go along. In the meantime, let me know if you have any questions or what you would like to see.