Bull or Bear Market… Doesn’t matter

Kyle Dennis’ new, 5 Min Strategy is poised to double Your Money Weekly!

Michael S. made 173% with Dollar Ace. So can you!


Market lesson: Speed up slow-moving options trades

Davis MartinDavis Martin ·

The thesis: Buying beaten-up blue-chip stocks towards the end of the year can be lucrative. Whether it’s a Santa Claus rally or the promise of a January effect or window dressing by mutual fund managers, a basic market lesson is that blue-chips tend to be a safe play around the holidays; trading beaten-up name-brand stocks was precisely why last November and December were my most profitable months of the year.

The latest: On Wednesday, I bought 4 IBM Feb. 16 (2018) $155 calls at $4.20 per contract. Normally, when trading options, I go a month out — to the third Friday of the following month — which would have landed my expiration date on Jan. 19.

But IBM is a slow mover. Very slow, unless they miss earnings (which they always seem to do, so there’s no way I’d hold the stock through an earnings announcement).

That’s why I bought an additional month’s time on the options. With slow-moving options trades, you want to let an ideally profitable trade run without getting damaged by theta loss, or time decay. That means extending your time frame.

How it turned out: I’m green on IBM, up over 10% on these options. The stock caught buyers faster than I  expected; it is creeping up on the 200-day simple moving average line and I’ll sell for a profit if it stalls there.

Moral of the story: On slower moving trades via options, buy more time. It will help you play blue-chips and big names while reducing theta loss, and that will make it easier for your trades to pay off.


Davis Martin is the head trader at Dailyprofitmachine.com. He trades SPY calls and puts and swing trades individual stocks and stock options. At the time this article was published on RagingBull.com, he had the 4 options contracts on IBM described in this commentary, but no other shares or open orders. This is his first-ever trade in IBM.

You may also like

Exclusive System Tracks Wall St. Insiders

“Dollar Ace Simply Exposes Information That Wall Street Wants To Keep Quiet” Said Kyle Dennis
“One member, Wesley M., has already reported 360%+ gains in just a few short days. Don’t miss this!”
(Reserve Access Now)

“What Recession?!” Jason Bond nets $55,060 in realized profit in One Day

After going 6 for 6 on profitable trades recently, we caught up with Jason to ask how he did it.
Check out Jason’s exclusive interview revealing this tightly guarded strategy. (Watch Now)

RagingBull.com Co-Founder, Jeff Bishop, Launches High Conviction Trade Service

“We listen to our clients and we give them EXACTLY what they want, so we designed a service to deliver 1 trade, 1 time a week, with a 100%+ PROFIT TARGET, directly to your inbox every Monday before the market opens. (Read More)

Be a Better Stock Trader, Starting Today

Get the expert insights, tips and strategies you need to optimize your trading skills and profiles