Options Trading: The Importance of Entry Timing
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Jason Ng
Apr 20, 2013, 10:10:05 AM4/20/13
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Article Title: Options Trading: The Importance of Entry Timing
Author: Jason Ng
Word Count: 540
Article URL: http://www.isnare.com/?aid=779358&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=779358
Easy Publish Tool: http://www.isnare.com/html.php?aid=779358
*********************** ARTICLE START ***********************
Entry timing is an important stock trading art made critical in options trading. If timing your entry is critical for stocks which you can hold perpetually, all the more it is critical for options with a finite lifespan.
Entry timing means finding the correct time to enter a position even though you have shortlisted it as a trading candidate. Your research tells you what to trade and your entry timing tells you when to take action. Perfect entry timing would have you enter a position a day before or even a minute before the underlying stock performs the predicted move, maximizing return on investment and capital usage. Good entry timing would prevent capital from being unproductive due to having to sit in positions that have yet to perform as predicted.
Entry timing is especially important in outright call options and put options buying due to the fact that options decline in value as the days go by due to a phenomena known as �Time Decay�. The longer the options are held, the lower their value becomes as you eagerly wait for the underlying to perform as predicted.
Sadly, entry timing is what most beginners to options trading fail to give serious research and attention to. This is true even for those with previous stock trading experience as stocks are a lot more forgiving of entry mistakes since the trader could choose to hold the position for as long as it takes for the position to play out its prediction.
Consequently, many beginners find themselves in a panic when expiration draws near with their options lined up for expiring worthless out of the money. Indeed, options don�t last forever and most of the options traded expire within three months of purchase. This is exactly why entry timing is so important in options day trading and options swing trading. In fact, no options trading methodology or system would be complete without entry criteria and procedure.
There are many ways to set up rules for entry timing and all professional options traders have their own criteria in what are known as personal �play books�. Entry timing rules and criteria must be designed for the specific trading methodology it is developed for. There are no one size fits all solutions. Beginners must choose to use or learn options trading systems that include entry timing criteria such as my Star Trading System at http://startradingsystem.mastersoequity.com .
Examples of entry timing includes watching the price action of the underlying for a period of time prior to placing the trade in order to ascertain entry sentiments or even looking at intraday moving averages or candlesticks to determine the exact best entry point. No matter what method is used, there must be objective rules governing such observations so that the process may not be clouded by emotions.
Entry timing is critical to your long term success in options trading and is definitely an area you need to look into as an options trader if you haven�t.
To learn more about how you can profit with options trading under all market conditions, visit our Option Trading website at Optiontradingpedia.com .
About The Author: Jason Ng is the Founder and Chief Option Strategist of Masters 'O' Equity Asset Management and author of http://Optiontradingpedia.com and http://Futurestradingpedia.com. Learn more about Option Trading at http://www.optiontradingpedia.com and learn more about Futures Trading at http://www.futurestradingpedia.com
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=779358
*********************** ARTICLE END ***********************
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Message delivered directly to members of the group:
publish-the...@googlegroups.com
*****************************************************************
Please consider this free-reprint article written by:
Jason Ng
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=779358
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=779358
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: Options Trading: The Importance of Entry Timing
Author: Jason Ng
Word Count: 540
Article URL: http://www.isnare.com/?aid=779358&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=779358
Easy Publish Tool: http://www.isnare.com/html.php?aid=779358
*********************** ARTICLE START ***********************
Entry timing is an important stock trading art made critical in options trading. If timing your entry is critical for stocks which you can hold perpetually, all the more it is critical for options with a finite lifespan.
Entry timing means finding the correct time to enter a position even though you have shortlisted it as a trading candidate. Your research tells you what to trade and your entry timing tells you when to take action. Perfect entry timing would have you enter a position a day before or even a minute before the underlying stock performs the predicted move, maximizing return on investment and capital usage. Good entry timing would prevent capital from being unproductive due to having to sit in positions that have yet to perform as predicted.
Entry timing is especially important in outright call options and put options buying due to the fact that options decline in value as the days go by due to a phenomena known as �Time Decay�. The longer the options are held, the lower their value becomes as you eagerly wait for the underlying to perform as predicted.
Sadly, entry timing is what most beginners to options trading fail to give serious research and attention to. This is true even for those with previous stock trading experience as stocks are a lot more forgiving of entry mistakes since the trader could choose to hold the position for as long as it takes for the position to play out its prediction.
Consequently, many beginners find themselves in a panic when expiration draws near with their options lined up for expiring worthless out of the money. Indeed, options don�t last forever and most of the options traded expire within three months of purchase. This is exactly why entry timing is so important in options day trading and options swing trading. In fact, no options trading methodology or system would be complete without entry criteria and procedure.
There are many ways to set up rules for entry timing and all professional options traders have their own criteria in what are known as personal �play books�. Entry timing rules and criteria must be designed for the specific trading methodology it is developed for. There are no one size fits all solutions. Beginners must choose to use or learn options trading systems that include entry timing criteria such as my Star Trading System at http://startradingsystem.mastersoequity.com .
Examples of entry timing includes watching the price action of the underlying for a period of time prior to placing the trade in order to ascertain entry sentiments or even looking at intraday moving averages or candlesticks to determine the exact best entry point. No matter what method is used, there must be objective rules governing such observations so that the process may not be clouded by emotions.
Entry timing is critical to your long term success in options trading and is definitely an area you need to look into as an options trader if you haven�t.
To learn more about how you can profit with options trading under all market conditions, visit our Option Trading website at Optiontradingpedia.com .
About The Author: Jason Ng is the Founder and Chief Option Strategist of Masters 'O' Equity Asset Management and author of http://Optiontradingpedia.com and http://Futurestradingpedia.com. Learn more about Option Trading at http://www.optiontradingpedia.com and learn more about Futures Trading at http://www.futurestradingpedia.com
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=779358
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
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