Alternative Options Symbol Trading?
are Alternative Options?
Alternative options are simply
QQQQ options that may be traded in place of, or in
addition to, the ï¿½regularï¿½ QQQQ option for which we have issued
a trading signal. The use of alternative options allows to
tailor the trading to better suit the personal risk profile.
A trader can choose among
a selection of several alternative options; these range from
conservative (lower risk) options to options with a higher
degree of risk.
to trade Alternative Options?
Trading alternative options is
easy. Rather than placing a
trade based on the ï¿½regularï¿½ option for which we have issued a
trading signal, an investor can simply purchase one of the alternative
options listed in its place.
We will always initiate a
position in accordance with our "Suggested Entry Price". Once
this price is hit, we will establish a position in the main
option. This would be the buy signal for an alternative options
trader as well. A
position is simply initiated in one of the alternative options at market once the
ï¿½Suggested Entry Priceï¿½ for our main option has been hit.
Similarly, note that we
always close our option positions in accordance with the
"Suggested Exit Price". Once this price is hit, we close out our
position in the main option. This would be the sell signal for
an alternative options trader as well.
The position is simply closed in one of the alternative options at
market once the ï¿½Suggested Exit Priceï¿½ for our main option has
One of the main
advantages of trading alternative options is that a trader
can choose the particular option that best suits his/her risk
tolerance. Higher risk options are generally cheaper (and
provide a higher profit potential) than the more conservative
(lower risk) options. Lower risk options are more expensive, but
less volatile; consequently, their profit potential is lower.
the trading of alternative options for several reasons:
Traders can choose the
particular options that best suit their risk tolerance. Higher
risk options are cheaper, and the expected profit is greater
Conservative (lower risk) options are more expensive, but less
volatile. Consequently, the the profit potential is reduced.
It is not a good idea to
allocate a big amount of your trading capital to one particular
option (i.e., to a specific strike and expiry date), because
this could affect the market and create desire of the market to
play against these investments.
traders may balance their portfolios by spreading their investing
dollars between risky and more conservative options. For
trade allocation is:
45% to our main option
35% to conservative option symbols,
20% to higher risk symbols.
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