More All Time Highs!

It seems like just the other week that everyone was worried about the rising rates and profit-taking pull backs…

Well, look where we are today!

ALL of the major averages pushed their way to all-time highs last week! And it doesn’t look like that momentum is going anywhere anytime soon.

Now, it’s important to remember that when we find ourselves at these market highs, another profit-taking pullback could be in the cards.

So what can you do to keep yourself protected while still trading?

For my style, I like to trade options. And one thing I do when trading options in this environment is buy extra time.

So, let’s say I find a company I want to trade… If I expect something bullish to happen in three months, I’ll buy six months of time.

See what I’m doing here? It’s all about buying yourself the time to be right!

And thanks to the power of options, even if a profit-taking pullback drags the market for an entire month, I should come out unscathed because I have the time to weather it!

Bottom line: I’m not doing anything complex here, just simple money management!

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Trading Tip of the Day: How to Know When We’re at the Market Top…

Greg Guenthner

We’ve been in quite the bull market for some time now. Sure there have been pullbacks here and there, but that’s mostly just people taking profits or rotating into new industries.

Among all the rallying however, there’s begun to be some sneaky talk of the feared market top.

Now, do these fears hold any weight?

There’s no way to know for sure… It’s often said that when people stop talking about a crash, a crash is around the corner.

I’m not sure how much weight that holds, but it’s always good to factor in the potential for a pullback.

You can always remain bullish while protecting your portfolio, it can even be as simple as trading in smaller position sizes.

That way if the market dips or your trade tanks, you’re not suffering an account churning loss.

You can also keep a speculative put option in your portfolio as insurance in case the market goes bottoms up.

There are plenty of ways to mitigate risk while still trading! Simply look at what options you have available and try out something that fits with your trading style.

— Greg Guenthner

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I’ve been accused of being a “perma-bull” more than a few times throughout my career.In fact, I’m smack in the middle of a texting war with a trading buddy of mine back in Chicago. He’s constantly sending me dire economic data (as if the market hasn’t seen the ugly numbers before) and insists stocks “HAVE TO CRASH” — and soon! Every pullback is the beginning of the end for him...

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.

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