Does Any Trader Buy Options With Less Than 45 Days Until Expiration?

Does Any Trader Buy Options With Less Than 45 Days Until Expiration?

At OptionsANIMAL (OA) the buy-rule is to only buy options with 45 days until expiration. So, the easy answer to the title question is NO. Therefore, do you
see options available for less than 45 days? YES!! What does that mean?

One of the most important classes available to all members of OptionsANIMAL is Class 1.1 named The OptionsANIMAL Method. The description is as follows:

What separates a good trader from an average trader? Are there common characteristics that the successful traders share? If so, can they be learned and be
replicated? Should trading and investing be haphazard or methodical? The answers to these questions are found in the OptionsANIMAL Method.

Welcome OptionsANIMAL 1.1. In this class we will look into the characteristics that successful traders share. The most important principle is that we
recognize that each of us is unique and individual. We must all learn to trade from our own personality, our background and our own experiences. There are
characteristics and behaviors that seem to be common to successful traders, and we will explore those. Certain traits and behaviors can, in fact, be
learned, and we will discuss them. Ultimately, you are unique and you will not be cloned or copied. You can however, learn and train yourself to become a
unique and successful trader.

We will also introduce you to the 6 Steps in the Trading Process. These six steps will give you a consistent approach to a complete trading process from
developing an expectation to ultimately closing the trade. The six steps will be followed throughout the curriculum.

In this class we will cover:

  • The Characteristics of the Successful Trader
  • Six Steps of the Trading Process

What should we understand in this? By reading the class summary, we can see that there is a basic method taught at OA. This class focuses on
characteristics of successful traders and the process for trading individual styles. If we consider this summary we recognize that the methods of trading
approaches are varied. Some traders choose short-term trading while others choose position trades that last several months. (Is there a difference in
results? Hmm mm. Another topic to consider!)

Jack Schwager has written a series of books about successful traders. [The Stock Market Wizards books] His purpose was to identify common personality
traits of the best traders and make firm suggestions to readers to “develop these traits” in order to become a reliable trader.

What are these characteristics?

  • Discipline
  • Perseverance
  • Flexibility
  • Patience
  • Goal-Setting
  • Action!

How do we learn these behavior characteristics? Practice! One of the methods of training members about these characteristics is through the Six Step
Methodology. During the education about how to use options, Coaches often ask questions about these steps, no matter what class is being taught. Does any
of you get the connection between the Six Steps and the personality characteristics? This may be where we turn the light-bulb ON in your brains, even if it
is within a different educational class than 1.1. (See the Blog that I published in 2013 for my thoughts on the Six Steps.)

Reading about investing is one of my favorite habits. However, applying my knowledge to improve my own investing is even more “favorite” to me. When I look
at my 20-plus-years of experience, I recognize many changes in my style. One basic style that has been steady over these years is growth-stock-investing.
(I do not think I will be giving that up anytime soon!) However, my time for holding onto a trade has changed over the years. At first I viewed myself as
an “investor” with a commitment to hold the long stock position for many years. (Buy-And-Hold.) Taking on the Can Slim methodology that was developed and
explained by William J. O’Neil, led me to identify buy opportunities. (Position Trading) However, since the 1990’s was a decade of bullishness, I did not
pay enough attention to the Sell Signs. Since I lost too much of my capital in the Bear Market of the early 2000’s I was keenly interested in learning to
trade options. Learning about the behavior of options led to my applying a variety of spread trades to these Can Slim equities, which reduced my holding
time in many cases, but improved my results. Finally, the Weekly Options were introduced on many of the growth stocks, which have provided me more
experience in Swing-Trading (less than a one-week hold period.)

There is a solid reason that OptionsANIMAL suggests that options be acquired with no less than 45 days until expiration. Their focus is on Trade
Adjustments. Since options involve time as well as money, the time is important for rescuing any investment loss. However, there are many options investors
who do not make adjustments to their trades. They view themselves as short-term-traders and will select options with less than 45 days until expiration.

There is an advantage in using stop-losses, even with options. Which would you choose stop-losses, or adjustments? This decision will answer the question
for you.

Emilu Bailes
OptionsANIMAL Instructor

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