How to Book Options Profits Without Gambling

p>Some people think stock market trading is nothing but gambling.

But that couldn’t be further from the truth…

Sure, it’s fun to go out and throw a couple of bucks around at the horse track. Sometimes I talk a couple of buddies into going down to the harness races on a slow weekend. But picking winners is practically random — especially at the harness races where it seems they can slow down the cart behind the horse.

When I was younger, I used to make the pilgrimage to Las Vegas the first week of March Madness. I had a good analytical system to help place my bets — and it was quite a rush watching dozens of games simultaneously at the sportsbook.

However, the silliness of seeing a meaningless basket blow up the spread at the end of the game was an all-too-often reminder that even with a good system, this was strictly gambling

Of course, betting on 16 games on Thursday and Friday and another 8 games on Saturday and Sunday was exhausting! I was happy to go back to work Monday where I can quantify my odds and relax doing what I do best — trading the markets.

As you can see, I’m not much of a gambler. I like to control the odds and know I have an edge like we do with our options plays. Trading is all about probability and money management…not gambling!

Save your crazy bets for Vegas…

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Chart of the Day: What rotation?

Greg Guenthner

On Wednesday, I mentioned that it wasn’t time to get too bearish on the Nasdaq tech darlings just yet. I showed you how many of these amazing tech stocks have ripped off triple-digit rallies since the market bottomed in March. They deserve the benefit of the doubt – even during a hard reset.

I also mentioned that I didn’t trust a lot of the moves we saw in “reopen” stocks. And look what happened…

Many of the market’s worst performing names that popped earlier this week are already starting to see some of the magic wear off. The euphoria didn’t last long, and most of these stocks look like they’ll remain in downtrends.

Meanwhile, the tech and work-from-home stocks started to catch a bid.

Check out work-from-home superstar Zoom Video Communications (NASDAQ:ZM):

zm

ZM has been one of the best performing tech stocks during the pandemic. But it found itself in the midst of a 35% drawdown earlier this week as speculators took profits. It has since rallied more than 15% since in just two trading days.

Yes, ZM has a lot more work to do to recapture those October highs. But I wouldn’t bet against this stock if it can remain above this week’s lows…

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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